3. Prepare a cash flow statement for the following information. (Indirect Method) Balance Sheet ($) Jan 1 Dec 31 ASSETS: Current Assets: Cash 310,000 600,000 Marketable Securities 1,200,000 1,000,000 Accounts Receivable, net 290,000 330,000 Inventory 3,000,000 4,000,000 Prepaid Expenses 200,000 300,000 Total Current Assets 5,000,000 6,230,000 Total Fixed Assets, net 2,500,000 2,000,000 Total Assets 7,500,000 8,230,000 LIABILITIES & EQUITIES Current Liabilities: Accounts Payable 1,500,000 1,000,000 Notes Payable 1,000,000 1,000,000 Accrued Expenses 500,000 800,000 Total Current Liabilities 3,000,000 2,800,000 Total Long-term Liabilities 1,000,000 1,500,000 Total Liabilities 4,000,000 4,300,000 Preferred Stock 500,000 500,000 Common Stock 500,000 500,000 Capital in Excess of Par 1,000,000 1,000,000 Retained Earnings 1,500,000 1,930,000 Total Stockholders Equity 3,500,000 3,930,000 Total Liabilities and Equity 7,500,000 8,230,000 Income Statement (for problem 3) Sales 10,000,000 COGS 6,000,000 Gross Profit 4,000,000 Administrative expenses 1,200,000 Depreciation 500,000 EBIT 2,300,000 Interest Expense 500,000 EBT 1,800,000 Taxes (40%) 720,000 Net Income 1,080,000