Prepare a cash flow statement for the following information. (Indirect Method)

Balance Sheet ($)

Jan 1 Dec 31 Inc/Dec

ASSETS:

Current Assets:

Cash 310,000 600,000 290,000

Marketable Securities 1,200,000 1,000,000 (200,000)

Accounts Receivable, net 290,000 330,000 40,000

Inventory 3,000,000 4,000,000 1,000,000

Prepaid Expenses 200,000 300,000 100,000

Total Current Assets 5,000,000 6,230,000

Total Fixed Assets, net 2,500,000 2,000,000 (500,000)

Total Assets 7,500,000 8,230,000

LIABILITIES & EQUITIES

Current Liabilities:

Accounts Payable 1,500,000 1,000,000 (500,000)

Notes Payable 1,000,000 1,000,000 -

Accrued Expenses 500,000 800,000 300,000

Total Current Liabilities 3,000,000 2,800,000

Total Long-term Liabilities 1,000,000 1,500,000 500,000

Total Liabilities 4,000,000 4,300,000

Preferred Stock 500,000 500,000 -

Common Stock 500,000 500,000 -

Capital in Excess of Par 1,000,000 1,000,000 -

Retained Earnings 1,500,000 1,930,000 430,000

Total Stockholders Equity 3,500,000 3,930,000

Total Liabilities and Equity 7,500,000 8,230,000

Income Statement (for problem 3)

Sales 10,000,000

COGS 6,000,000

Gross Profit 4,000,000

Administrative expenses 1,200,000

Depreciation 500,000

EBIT 2,300,000

Interest Expense 500,000

EBT 1,800,000

Taxes (40%) 720,000

Net Income 1,080,000