Assets	2009	2010
Cash	$ 45,000	$ 50,000
Marketable Securities	175,000	160,000
Accounts Receivable	140,000	110,000
Inventory	230,000	375,000
Investments	170,000	55,000
Plant & Equipment	1,500,000	1,750,000
Less Depreciation	(450,000)	(600,000)
Net Plant & Equipment	1,050,000	1,150,000
Total Assets	$ 1,810,000	$ 1,900,000
Liabilities & Equity
Accounts Payable	$ 110,000	$ 85,000
Notes Payable	150,000	140,000
Accrued Expenses	80,000	35,000
Income Taxes Payable	10,000	15,000
Bonds Payable	860,000	955,000
Common Stock( 100,000)	100,000	100,000
Capital Paid In Excess of Par	100,000	100,000
Retained earnings	400,000	470,000
Total Liabilities & Equity	$ 1,810,000	$ 1,900,000
Income Statement December 2010
Sales		$ 7,000,000
Cost of Goods Sold		4,200,000
Gross Profit		2,800,000
Selling & Administrative		260,000
Operating Profit		2,540,000
Depreciation		150,000
Earnings Before Interest & Taxes		2,390,000
Interest Expense		160,000
Earnings Before Taxes		2,230,000
Taxes (50%)		1,115,000
Net Income		$ 1,115,000
Dividends Paid		$ 1,045,000

1. Given the financial information for the A.E. Neuman Corporation,
   1. Prepare a Statement of Cash Flows for the year ended December 31, 2010.
   2. What is the dividend payout ratio for 2010?
   3. If we increased the dividend payout ratio to 100%, what would happen to retained earnings at year end 2010?