2. Following is comparative balance sheets for Jones Corporation. An income statement appears as well.

Balance Sheet

End of 2007 2008

Cash 50,000 16,000

A/R 60,000 75,000

Inventory 90,000 100,000

Fixed Assets 500,000 700,000

Less Accumulated Depr. 200,000 230,000

Net Fixed Assets 300,000 470,000

Total Assets 500,000 661,000

Accounts Payable 50,000 55,000

Bonds Payable 100,000 90,000

Common Stock 100,000 100,000

Capital paid in excess of Par 75,000 75,000

Retained Earnings 175,000 341,000

Total Liabilities and

Stockholder's Equity 500,000 661,000

Income Statement

SALES $1,000,000

LESS COGS 300,000

GROSS PROFIT 700,000

LESS OPERATING EXPENSES 300,000

LESS DEPRECIATION EXPENSE 30,000

EBIT 370,000

LESS INTEREST EXPENSE 10,000

EBT 360,000

LESS TAXES 144,000

EAT $216,000

ADDITIONAL INFORMATION: Dividends paid totaled $ 50,000.

Statement of Cash Flows

Operating Activities:

NI _

Net Operating Cash Flows ___________________

Investing Activities:

________________ ________________

Net Investing Cash Flows __________________ Financing Activities:

Dividends

Net Financing Cash Flows _________

Net Cash Flows ===================

Prepare the Statement of Cash Flows and analyze the change in cash flows.