Comparativebalance sheetsand thestatement of income and retained earningsfor Bayshore Industries, Inc. are presented below. Use this information to answer the subsequent questions.

Using the indirect method, prepare the portions of the Statement of Cash Flows of Bayshore Industries, Inc. shown below for the year ended December 31, Year 2.

Account options for Statement of Cash Flows:

Allowance for Bad debt

Cash collected from licenses

Cash paid for income tax

Cash paid to suppliers and employees

Cash received from lessees

Collections from customers

Depreciation and Amortization Expense

Deferred Income tax

Dividends paid

Dividends Recieved

Gain/Loss on property and Equipment Disposals

Increase/Decrease in Inventory

Increase/Decrease in Accounts Payable and Accrued Expenses

Increase/Decrease in Intangibles

Increase/Decrease in Prepaid Expenses

Increase/Decrease in Trade Recievables - Net

Interest Paid

Interest Received

Net Income

Proceeds from issuance of common stock

Proceeds from issuance of long term debt

Proceeds from plant and equipment disposals

Proceeds from/Repayment of line of credit

Purchases of property and equipment

Repayment of long-term debt

Bayshore Industries, Inc.
BALANCE SHEETS
December 31, Year 2 and Year 1
	Year 2	Year 1	Change
Assets
Current assets
Cash and cash equivalents	$216,000	$144,000	$72,000
Trade receivablesnet	3,434,000	1,971,000	1,463,000
Inventory	810,000	216,000	594,000
Prepaid expenses	18,000	0	18,000
Total current assets	4,478,000	2,331,000	2,147,000
Property and equipment	7,780,000	7,740,000	40,000
Less: accumulated depreciation	576,000	455,000	121,000
Property and equipmentnet	7,204,000	7,285,000	(81,000)
Intangibles, less accumulated amortization of $14,400Year 2 and $7,200Year 1	21,600	28,800	(7,200)
Total assets	$11,703,600	$9,644,800	$2,058,800
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses	$872,600	$396,800	$475,800
Line of credit	108,000	90,000	18,000
Current portion of long-term debt	29,000	27,000	2,000
Total current liabilities	1,009,600	513,800	495,800
Long-term debt	3,069,000	3,098,000	(29,000)
Total liabilities	4,078,600	3,611,800	466,800
Stockholders' equity
Common stock	9,000	9,000	0
Additional paid-in capital	5,400,000	5,400,000	0
Retained earnings	2,216,000	624,000	1,592,000
Total stockholders' equity	7,625,000	6,033,000	1,592,000
Total liabilities and stockholders' equity	$11,703,600	$9,644,800	$2,058,800

Bayshore Industries, Inc.
STATEMENT OF INCOME AND RETAINED EARNINGS
For the year ended December 31, Year 2
Net sales	$19,800,000
Cost of sales	9,000,000
Gross profit on sales	10,800,000
Operating expenses
Selling expenses	3,600,000
General and administrative expenses	4,050,000
Other operating expenses	393,300
Total operating expenses	8,043,300
Operating income	2,756,700
Other income and expenses
Gain/loss on property and equipment disposal	18,000
Interest income	9,000
Interest expense	(252,000)
Other income and expensesnet	(225,000)
Income before income taxes	2,531,700
Provision for income taxes	759,700
Net income	1,772,000
Retained earningsbeginning	624,000
Dividends paid	(180,000)
Retained earningsending	$2,216,000

Additional information on transactions during the year ended December 31, Year 2:

	All accounts receivable relate to customer sales
	All accounts payable relate to suppliers
	All fixed assets were acquired for cash
	A building with an original cost of $360,000 and accumulated depreciation of $319,500 was sold for $58,500
	The company had no new long-term debt in Year 2
	Interest paid in the current year was $250,000
	Cash paid for income taxes in the current year was $700,000
	There were no non-cash financing or investing activities during the year