• BBB Company’s balance sheet and income statement follow: BBB COMPANY Balance Sheet December 31, 2007 and 2006 December 31, 2007 2006 Assets Cash $ 4,500 $ 4,000 Marketable securities 2,500 2,000 Accounts receivable 6,800 7,200 Inventories 7,500 8,000 Total current assets 21,300 21,200 Land 11,000 12,000 Equipment 24,000 20,500 Accumulated depreciation—equipment (3,800) (3,000) Building 70,000 70,000 Accumulated depreciation—building (14,000) (12,000) Total assets $108,500 $108,700 Liabilities and Stockholders’ Equity Accounts payable $ 7,800 $ 7,000 Wages payable 1,050 1,000 Taxes payable 500 1,500 Total current liabilities 9,350 9,500 Bonds payable 30,000 30,000 Common stock, $10 par 32,000 30,000 Additional paid-in capital 21,000 19,200 Retained earnings 16,150 20,000 Total liabilities and stockholders’ equity $108,500 $108,700 BBB COMPANY Income Statement For Year Ended December 31, 2007 Sales $38,000 Operating expenses: Depreciation expense $ 2,800 Other operating expenses 35,000 37,800 Operating income 200 Gain on sale of land 800 Income before tax expense 1,000 Tax expense 500 Net income $ 500 Supplemental information: Dividends declared and paid $ 4,350 Land sold for cash 1,800 Equipment purchased for cash 3,500 Common stock sold for cash 3,800 Required a. Prepare a statement of cash flows for the year ended December 31, 2007. (Present the cash flows from operations, using the indirect method.) b. Comment on the statement of cash flows.