Based on the following information, prepare the statement of cash flows using the indirect method.

E. Ray Sir Company

Balance Sheet

2003 2002 Change

Current Assets:

Cash $53,000 $29,000 24,000

Accounts Receivable 67,000 71,000 (4,000)

Inventory 95,000 96,000 (1,000)

Prepaid Expenses 14,000 11,000 3,000

Long-term assets

Plant and Equipment (net) 128,000 117,000 11,000

_______ _______

Total Assets 357,000 324,000

Current Liabilities:

Accounts Payable 24,000 22,000 2,000

Interest Payable 11,000 16,000 (5,000)

Salary Payable 6,000 9,000 (3,000)

Other Accruable 27,000 21,000 6,000

Tax Payable 7,000 9,000 (2,000)

Long-Term Liabilities

Bond Payable 58,000 49,000 9,000

Stockholders