Motel's two-year comparative balance sheet:

Assets12-31-0712-31-08

Current Assets

Cash 4,1005,200

Credit card receivables 4,7005,500

Accounts receivable 1,200 700

Inventory 3,0003,600

Marketable securities 8,0007,000

Prepaid expenses 1,2001,500

Total Current Assets22,20023,500

Property, Plant & Equipment

Land 30,000 30,000

Building 150,000 150,000

Accum. depreciation, building (41,900) (50,200)

Furniture & equipment 22,700 25,400

Accum. Depreciation, furniture & equipment (15,400)(19,100)

Total Property, Plant & Equipment 145,400136,100

Total Assets 167,600159,600

Liabilities & Stockholders' Equity

Current Liabilities

Accounts payable 6,900 7,000

Accrued expenses payable 1,400 1,700

Income taxes payable 2,000 1,500

Current portion of mortgage payable 11,500 10,400

Total Current Liabilities 21,800 20,600

Long-term Liabilities

Long-term mortgage payable 100,00089,600

Total Liabilities 121,800110,200

Stockholders' Equity

Capital stock, common 23,000 23,000

Retained earnings 22,800 26,400

Total Stockholders' Equity 45,800 49,400

Total Liabilities & Stockholders' Equity167,600 159,600

Additional information from the motel's income statement:

Net Income for 2008 was $6,800.

Annual depreciation expense for 2008 was $12,000 (building and furniture and equipment).

Dividends paid to shareholders in 2008 was $3,200.

Technical note: owing to the presentation of this Motel's balance sheet you need to know that dividends were paid. The motel provided a separate Statement of Retained Earnings that showed the dividends.In class, we usually combined the Statement of Retained Earnings in the Shareholders' Equity section of the Balance sheet so that we could see it more easily.We included beginning retained earnings plus current year Net Income minus dividends paid to compute ending retained earnings, all on the standard balance sheet. In this problem, if you look at the Change in Retained earnings from 2007 to 2008 you find:

$26,400 - 22,800 = $3600 + $3200 of dividends paid = $6,800 of Net Income for 2008.

Using the comparative balance sheet and the additional information, do a Statement of Cash Flows

1. What was the amount of Cash on Hand as of 12/31/2007 (this is called Beginning Cash).

2. What was the amount of Cash on Hand as of 12/31/2008 (this is called Ending Cash)?

3. What was the change in Cash Flow between 12/31/2007 and 12/31/2008 (this is the "answer").

4. Do a nicely formatted Statement of Cash Flows for the year ended 12/31/2008.