STATEMENT OF CASH FLOWS EXAMPLE: Chicago Lock & Key Company Comparative Balance Sheets as of 12/31/15 and 12/31/16 2015 2016 Cash $1,150 $2,350 Receivables 1,350 1,800 Inventory 1,900 1,600 Property, Plant, and Equipment 1,700 1,750 Accumulated Depreciation (1,150) (1,080) L/T Investments (assume at cost) 1,400 1,300 $6,350 $7,720 Accounts Payable $ 900 $1,200 Accrued Liabilities 300 200 Interest Payable 50 50 Income Taxes Payable 0 100 Bonds Payable 1,500 1,400 Capital Stock + APIC 1,700 1,950 Retained Earnings 1,900 2,820 $6,350 $7,720 Chicago Lock & Key Company Income Statement for the year ended 12/31/16 Sales Cost of Goods Sold Gross Margin Operating Expenses: Selling Expenses Gen & Admin. Expenses Interest Expense Depreciation Expense Income from operations Other Income: Gain on Sale of Investments Loss on sale of PP&E $ 6,900 (4,700) $ 2,200 $ (350) (550) (100) (50) (1,050) $ (1,150) 50 1 Additional Information: Dividend Income Income before taxes Income Tax Expense NET INCOME (10) 130 $1,320 (300) $ 1,020 All sales of inventory are made on account (and receivables only have sales on account in the account). All purchases of inventory are made on account (perpetual method of inventory) and accounts payable only has inventory purchases in it). Accrued liabilities pertain to SG&A expenses. Equipment with an original cost of $150 was sold at a $10 loss.