The year-end financial statements of Acres company are presented below:

Acres Company Balance Sheets

December 31,

Increase __2010__ __2009__ (Decrease) Cash . . . . . . . . . . . . . . .. . . . $ 9,000 $ 8,000 $ 1,000

Accounts receivable . . . . . . . . . . . 15,000 18,000 ( 3,000)

Inventories. . . . . . . . . . . . . . . . __44,000_ _45,000 ( 1,000)

Total Current Assets. . . . . . . . . $ 68,000 $ 71,000 ($ 3,000)

Patent . . . . . . . . . . . . . . . . . 16,000 -0- 16,000

Long-term investments in stock of Campbell Company, at cost . . . . . . . . 12,000 14,000 ( 2,000)

Property, plant and equipment . . . . . . 82,000 68,000 14,000

LESS: Accumulated depreciation . . . . . (19,000) (18,000) ( _1,000)

TOTAL ASSET $159,000 $135,000 $24,000 ________ ________ ________

Accounts payable . . . . . . . . . . . $15,000 $ 12,000 3,000

Income taxes payable, current . . . . . . 8,000 6,000 2,000

Current maturities on serial bonds Payable. . . . . . . . . . . . . . __ 1,000 __ 1,000 ____-0-

Total Current Liabilities. . . . . $ 24,000 $ 19,000 $ 5,000

Deferred income taxes payable, long-term . . . . . . . . . . . . . . 4,000 -0- 4,000

Serial bonds payable, 5%, maturing in $1,000 serials at annual intervals beginning January 1, 2009 . . . . . 21,000 22,000 ( 1,000)

Premium on serial bonds payable . . . . . 1,000 1,100 ( 100)

Note payable, long term . . . . . . . . . . 4,000 -0- 4,000

Common stock . . . . . . . . . . . . . . 50,000 45,000 5,000

capital in excess of par . . . 5,000 3,900 1,100

Retained earnings . . . . . . . . . . . 50,000 _ 44,000 _6,000

TOTAL LIABILITIES & SHAREHOLDERS EQUITY $159,000 $135,000 $24,000 _______ ________ ________

Acres Company Income Statement Year Ended December 31, 2010

Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . $100,000

Cost of Sales . . . . . . . . . . . . . . . . . . . . . _57,000_

Gross Profit . . . . . . . . . . . . . . . . . . . . . $ 43,000

Operating Expenses Salaries . . . . . . . . . . . . . . . . .$2,000

Depreciation . . . . . . . . . . . . . . . 4,000

Patent Amortization . . . . . . . . . . . 1,000

Interest . . . . . . . . . . . . . . . . . 2,500

Income Taxes Current . . . . . . . . . . . . . . . 8,000

Deferred . . . . . . . . . . . . . . . 4,000

Other Gains and Losses Gain on Sale of Investments . . . . . . . 3,000

Loss of Sale of Machinery . . . . . . . . (500)

Net income . . . . . . . . . . . . . . . . . . . . . . .$ 24,000 ________

Additional Information: 1. During 2010 part of the long-term investment in the common stock of Campbell Company was sold for $5,000. The cost of these shares was $2,000 at acquisition. 2. During 2010 machinery was sold for proceeds of $1,500, the cost of this machinery was $5,000. Accumulated depreciation on this machinery to date of disposal was $3,000. 3. During 2010 Acres Company purchased various fixed assets. Of these acquisitions, $4,000 was financed by issuance of the long-term note payable, and the remainder was bought with cash. 4. Dividends paid for 2010 amounted to $18,000. 5. During 2010 Acres Company issued common stock with a par value of $5,000. This was the only transaction which involved capital stock during 2010. 6. During 2010 Acres Company purchased a patent for cash.

REQUIREMENT #1: Complete the attached Statement of Changes in Financial Position on the working capital(indirect)basis for 2010 for Acres Company.

REQUIREMENT #2: Complete using direct method