5. Prepare a cash flow statement for the following information. You can prepare the Operating Section using the direct or 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 ques 5)

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

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