Use the abbreviated comparative financial statements for West Coast Construction, Inc. in the Working Papers.

Instructions: 

1. Review the comparative income statement and identify the amounts of net income (or net loss) and depreciation expense for the period. Indicate if each item represents a source of cash or use of cash. 

2. Analyze the comparative balance sheet and complete the following steps:

a. Prepare a list of current assets and current liabilities.

b. Write the balances for the current year and prior year.

c. Classify each account as a current asset or current liability.

d. Compute the amount of increase or decrease from the prior year.

e. Indicate if the increase or decrease represents a source of cash or a use of cash. 

3. Analyze the comparative balance sheet and complete the following steps:

a. Prepare a list of long-term assets.

b. Write the balances for the current year and prior year.

c. Compute the amount of increase or decrease from the prior year.

d. Indicate if the increase or decrease represents a source of cash or a use of cash. 

4. Reexamine the comparative balance sheet and complete the following steps:

a. Prepare a list of long-term liabilities.

b. Compute the amount of increase or decrease from the prior year.

c. Indicate if the increase or decrease represents a source of cash or a use of cash. 

5. Review the comparative statement of stockholders' equity and (1) identify the amounts of any additional stock issued or cash dividends paid and (2) indicate if each item represents a source of cash or use of cash. 

6. Prepare the operating, investing, and financing activities sections of a statement of cash flows. 

7. Enter the cash balance at the beginning of the year as shown on the comparative balance sheet. 

8. Compute the cash balance for the end of the period to complete the statement of cash flows. 

9. Verify the accuracy of the statement of cash flows by comparing the statement's ending cash balance with the cash balance listed for the current year on West Coast's comparative balance sheet.