The 2018 comparative balance sheet and income statement of Bone Appetit Pet Supply, Inc., are:

Bone Appetit Pet Supply, Inc., had no noncash investing and financing transactions during 2018. During the year, Bone Appetit Pet Supply, Inc., sold no land or equipment, issued no notes payable, retired no stock, and had no treasury stock transactions.

Requirements

1. Prepare the 2018 statement of cash flows, formatting operating activities using the indirect method.

2. How will what you learned in this problem help you evaluate an investment in Bone Appetit Pet Supply, Inc.?

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Bone Appetit Pet Supply, Inc. Comparative Balance Sheet December 31, 2018 and 2017 INCREASE |(DECREASE) 2017 2018 Current Assets: $ 6,600 $ 5,500 $ 1,100 Cash and Cash Equivalents Accounts Receivable 25,200 91,900 26,600 89,800 (1,400) 2,100 Inventory Fixed Assets: Land 89,900 53,200 60,700 49,600 $232,200 $ 34,600 29,200 3,600 Equipment, Net $266,800 Total Assets Current Liabilities: $ 30,900 $ 35,700 $ (4,800) Accounts Payable Accrued Liabilities 30,600 28,500 2,100 Long-Term Liabilities: Notes Payable Stockholders' Equity: 74,000 101,000 (27,000) 24,500 Common Stock 88,900 42,400 64,400 Retained Earnings 2,600 $232,200 $ 34,600 39,800 $266,800 Total Liabilities and Stockholders' Equity Bone Appetit Pet Supply, Inc. Income Statement Year Ended December 31, 2018 Revenues: Sales Revenue $211,000 Interest Revenue 8,500 Total Revenues $219,500 Expenses: Cost of Goods Sold $ 70,500 Salaries Expense Depreciation Expense Other Operating Expenses Interest Expense Income Tax Expense Total Expenses 27,300 4,600 10,800 11,800 29,800 154,800 $ 64,700 Net Income