1. Atlantic Inc. had the following noncash current asset and current liabilities balances at the end of 2010 and 2011:

	2010		2011
Accounts receivable	$ 50,000		$ 42,000
Inventory	190,000		160,000
Prepaid insurance	10,000		6,000
Accounts payable	25,000		30,000

Net income for 2011 was $940,000 and depreciation expense was $25,000. All sales and all purchases are on account. Atlantic uses the indirect method for preparing the statement of cash flows.