The following information was taken from Lamberson Company’s accounting records:

Additional information for the year:

Sales ...........................................................$ 39,930
Cost of goods sold .....................................(19,890)
Depreciation expense ................................(2,100)
Wages expense .........................................(11,000)
Other operating expenses ........................(1,000)
Bond interest expense ................................(410)
Dividend revenue ..........................................820
Gain on sale of investments .......................700
Loss on sale of equipment .......................(200)
Income tax expense ..............................(2,050)
Net income ............................................$ 4,800

b. Dividends declared and paid totaled ..$700.
c. On January 1, 2019, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
d. Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
e. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
f. Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
g. Equipment was purchased at a cost of $16,200.
h. The 12% bonds payable were issued on August 31, 2019, at 97. They mature on August 31, 2029. The company uses the straight-line method to amortize the discount.

i. Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
j. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

Required:
1. Prepare a spreadsheet to support Lamberson Company’s 2019 statement of cash flows.
2. Prepare the statement of cash flows.
3. Next Level Compute the cash flow from operations to sales ratio and the profit margin ratio for 2019. What is the primary reason for the difference in the results of the ratios?

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Account Balances December 31, 2018 December 31, 2019 Debits $ 1,400 2,800 1,700 500 $ 2,400 2,690 3,000 800 Cash Accounts Receivable (net) Marketable Securities (at cost) Allowance for Change in Value Inventories 8,100 1,300 7,000 15,000 32,000 7,910 1,710 5,400 15,000 46,200 290 Prepaid Items Investments (long-term) Land Buildings and Equipment Discount on Bonds Payable $69,800 $85,400 Credits Accumulated Depreciation Accounts Payable Income Taxes Payable Wages Payable Interest Payable Note Payable (long-term) 12% Bonds Payable Deferred Taxes Payable Convertible Preferred Stock, $100 par Common Stock, $10 par Additional Paid-in Capital $16,000 3,800 2,400 1,100 $16,400 4,150 2,504 650 400 3,500 10,000 1,196 800 9,000 14,000 8,700 500 21,500 13,700 800 Unrealized Increase in Value of Marketable Securities Retained Earnings 10,000 $69,800 14,100 $85,400