1) Prepare a statement of cash flows (SCF) using the Direct Method.

2) Prepare a reconciliation of net income to cash from operations

Assets	2014	2015
Cash	$400	$900
Accounts Receivable	1500	1400
Inventory	8200	9300
Prepaid Insurance	1400	1100
Equipment	4600	5500
Accumulated Depreciation	(1200)	(2000)
Long term Investment in Debt Securities ( held to maturity)	3500	5200
Land	6000	5000
Total Assests	$24400	$26400
Liabilities and Equity
Salaries Payable	900	1000
Interest Payable	500	300
Accounts Payable- Merchandise	1100	800
Income Tax Payable	1600	600
Note Payable (long term)	5300	1000
Common Stock	7500	9000
Paid-in capital in excess of par- common stock	500	1000
Retained Earnings	7000	12700
Total Liabilities and Equity	$24,400	$26,400