1. Use the following income statement and information about selected current assets and current liabilities for Kimberline Industries to calculate the net cash provided or used by operating activities using the indirect method.

KIMBERLINE INDUSTRIES Income Statement For Year Ended December 31, 2015
Sales		$280,000
Cost of goods sold		124,000
Gross profit from sales		$156,000
Operating expenses:
Salaries and wages expense	$35,000
Depreciation expense	11,000
Rent expense	27,200
Interest expense	3,900	77,100
Income from operations		$78,900
Loss on sale of land		4,700
Net income		$74,200

Increases and decreases of current asset and current liability accounts, all of which relate to operating activities, are as follows:

	Change
Accounts receivable increase	$3,600
Merchandise inventory decrease	1,700
Accounts payable increase	1,100
Salaries and wages payable decrease	2,600

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2. Express the following balance sheets for Safety Company in common-size percentages.

Safety Company Balance Sheets December 31, 2015 and 2014
	2015	2014
Assets
Cash	$43,000	$22,000
Accounts receivable	38,000	42,000
Merchandise inventory	61,000	52,000
Prepaid insurance	6,000	9,000
Long-term investments	49,000	20,000
Plant assets (net)	218,000	218,000
Total assets	$415,000	$363,000
Liabilities and Equity
Current liabilities	$62,000	$75,000
Long-term liabilities	45,000	36,000
Common stock	150,000	150,000
Retained earnings	158,000	102,000
Total liabilities and equity	$415,000	$363,000

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