The ABC Motel has the following Financial Statements from year end 2008. The owner cannot understand why he has $64,000 in retained earnings and a net income of $16,800 after tax from year 2008, but has no money in the bank. Please conduct a 1. cash flow analysis, 2. Statement of Cash Flows and 3. Using these tools give the owner a narrative explanation why there is no money.

ASSETS	12/31/2007	12/31/2008	Source	Use	Activity
BALANCE SHEET
Cash	$8,800	-
Accounts Receivable	$17,200	$30,600
Inventory	$2,100	$5,500
TOTAL CURRENT ASSETS	$28,100	$36,100
Land	$20,000	$20,000
Building	$50,600	$100,600
Accum. Depreciation	($30,000)	($40,000)
TOTAL	$96,800	$152,800
LIABILITIES & EQUITIES
Accounts Payable	$6,700	$12,800
Bank Loan	-	$7,900
TOTAL CURRENT LIABILITIES	$6,700	$20,700
Mortgage/Building	-	$30,000
Common Stock	$2,000	$2,000
Retained Earnings	$60,000	$64,000
TOTAL	$75,400	$137,400
INCOME STATEMENT		12/31/2008
Revenue		$110,000
Operating Costs		$93,200
Depreciation		$10,000
Net Income		$16,800
STATEMENT OF RETAINED EARNINGS
Retained Earnings:12/31/08		$60,000
Net Income for Year		$16,800
SUBTOTAL		$76,800
Deduct: Dividends Paid		$12,800
Retained Earnings: 12/31/08		$64,000
			$	$	$
STATEMENT OF CASH FLOW
YEAR ENDING 12/31/08
OPERATING ACTIVITIES			Source	Use
Accounts Receivable
F&B Inventory
Accounts Payable
Accrued Expenses
Bank Loan
NET INCOME
DEPRECIATION					NET
		TOTALS
INVESTMENT ACTIVITIES
Marketable Securities
Furniture & Equipment
Land
Building					NET
		TOTALS
FINANCING ACTIVITIES
Mortgage
New Shares Issued
DIVIDEND PAID					NET
		TOTALS

Three Reasons There is No Money?