Required: Prepare the statement of cash flows below using the financial statements provided.

104, LLC

STATEMENTS OF CASH FLOWS

Years Ended December 31, 2016 and 2015

2016

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

Adjustments to reconcile net income to cash flows

from operating activities:

Depreciation

Decrease (Increase) in operating assets:

Trade accounts receivable

Inventory

Security deposits

Employee advances

Increase (Decrease) in operating liabilities:

Accounts payable

Accrued expenses and pension

Interest payable

Commissions payable

Income taxes payable

Cash flows provided (used) by operating activities

-

CASH FLOWS FROM INVESTING ACTIVITIES

Computer and office equipment purchases

Cash flows used by investing activities

-

CASH FLOWS FROM FINANCING ACTIVITIES

New borrowings in excess of principal payments

Principal payments in excess of new borrowings

Dividends paid

Cash flows provided (used) by financing activities

-

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS

-

CASH AND CASH EQUIVALENTS - BEGINNING

CASH AND CASH EQUIVALENTS - ENDING

104, LLC
BALANCE SHEETS
December 31, 2016 and 2015
ASSETS
						2016		2015
CURRENT ASSETS
	Cash and cash equivalents					$422,631		$544,482
	Trade accounts receivable					3,504,964		2,893,233
	Inventory					240,400		68,000
		Total current assets				4,167,995		3,505,715
PROPERTY AND EQUIPMENT, Net						46,901		6,881
OTHER ASSET, Security Deposits						2,600		-
TOTAL ASSETS						$4,217,496		$3,512,596
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable					$717,304		$488,373
	Accrued expenses and pension					47,000		98,750
	Interest payable					7,301		3,172
	Commissions payable					25,600		32,600
	Income taxes payable					23,500		39,161
	Line of credit payable					1,360,000		480,000
		Total current liabilities				2,180,705		1,142,056
NONCURRENT LIABILITIES
	Notes payable to related parties					270,000		270,000
STOCKHOLDERS' EQUITY
	Common stock ($10 par value; 10 shares authorized,
	issued and outstanding)					100		100
	Additional paid in capital					176,000		176,000
	Retained earnings					1,590,691		1,924,440
		Total stockholders' equity				1,766,791		2,100,540
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY						$4,217,496		$3,512,596
104, LLC
STATEMENTS OF INCOME
December 31, 2016 and 2015
						2016		2015
NET SALES						$49,999,508		$44,889,252
COST OF GOODS SOLD						47,512,794		41,823,359
GROSS PROFIT						2,486,714		3,065,893
SELLING AND ADMINISTRATIVE EXPENSES						1,935,411		1,065,839
OPERATING INCOME						551,303		2,000,054
OTHER EXPENSE, Interest						135,222		108,510
INCOME BEFORE STATE INCOME TAXES						416,081		1,891,544
PROVISION FOR STATE INCOME TAXES						23,500		50,761
NET INCOME						$392,581		$1,840,783
104, LLC
STATEMENTS OF RETAINED EARNINGS
Years Ended December 31, 2016 and 2015
						2016		2015
RETAINED EARNINGS - BEGINNING						$1,924,440		$258,340
NET INCOME						392,581		1,840,783
LESS: DIVIDENDS						(726,330)		(174,683)
RETAINED EARNINGS - ENDING						$1,590,691		$1,924,440
104, LLC
SCHEDULES OF COST OF GOODS SOLD
Years Ended December 31, 2016 and 2015
						2016		2015
	Beginning inventory					$68,000		$364,600
	Purchases					46,327,218		40,154,183
	Freight and shipping					1,357,976		1,372,576
		Cost of goods available for sale				47,753,194		41,891,359
	Less: Ending inventory					240,400		68,000
		Total cost of goods sold				$47,512,794		$41,823,359
104, LLC
SCHEDULES OF SELLING AND ADMINISTRATIVE EXPENSES
Years Ended December 31, 2016 and 2015
						2016		2015
	Selling Expenses
	Commissions					$90,204		$257,761
	Advertising					1,780		3,559
	Auto and travel					85,430		63,969
	Meals and entertainment					52,072		60,398
		Total selling expenses				229,486		385,687
	Administrative Expenses
	Officers' salaries					957,000		278,000
	Other salaries					392,836		93,525
	Payroll tax expense					47,337		23,248
	Officers' life insurance					22,323		16,920
	Bank and credit card charges					3,632		-
	Contributions					2,395		-
	Depreciation					5,420		3,440
	Equipment lease					12,683		-
	Insurance					39,394		29,889
	Legal and accounting fees					13,672		18,350
	Miscellaneous expense					15,600		20,086
	Office supplies & expense					66,350		84,905
	Pension expense					45,000		41,700
	Postage					5,389		4,024
	Rent					14,258		10,969
	Repairs & maintenance					9,471		5,091
	Supplies					6,082		7,235
	Telephone					43,619		39,931
	Utilities					3,464		2,839
		Total administrative expenses				1,705,925		680,152
	Total selling and administrative expenses					$1,935,411		$1,065,839