Balance Sheets 2021 2020

Cash 2,200,000 2,850,000

Accounts receivable 5,500,000 6,275,000

Inventory 4,000,000 4,000,000

Current assets 11,700,000 13,125,000

Gross fixed assets 24,850,000 26,780,000

Accumulated depreciation 900,000 850,000

Net fixed assets 23,950,000 25,930,000

Total assets 35,650,000 39,055,000

Accounts payable 3,600,000 3,800,000

Accruals 1,450,000 2,200,000

Current liabilities 5,050,000 6,000,000

Long-term debt (bonds) 12,500,000 13,600,000

Common stock 2,000,000 2,000,000

Paid-in capital 5,000,000 5,000,000

Retained earnings 11,100,000 12,455,000

Total liab & equity 35,650,000 39,055,000

Income Statements 2021 2020

Sales 98,000,000 126,500,000

Cost of goods sold 50,000,000 58,500,000

Operating expenses 36,000,000 50,000,000

Depreciation expense 50,000 50,000

EBIT 11,950,000 17,950,000

Interest expense 1,440,000 1,620,000

EBT 10,510,000 16,330,000

Taxes (40%) 4,204,000 6,532,000

NI 6,306,000 9,798,000

Cash dividends paid 7,661,000 8,443,000

1. Based on the comparative balance sheets and comparative income statements, construct a statement of cash flows.

Statement of Cash Flows for 2021

Operating Activities

Net Income

Adjustments:

Non-cash adjustments

Accumulated depreciation

Changes in working capital

Change in accounts receivable

Change in inventories

Change in accounts payable

Change in accruals

Net cash provided by Operating Activities

Long-Term Investment Activities

Cash used to acquire fixed assets

Financing Activities

Change in long-term debt

Change in common stock

Change in paid-in capital

Payment of cash dividends

Net cash provided by Financing Activities

Summary

Net change in cash

Cash at beginning of year

Cash at end of year