1. (Worksheet Preparation or indirect Statement of Cash Flows) Below is the comparative balance sheet for ABC Industries.

Dec. 31, Dec. 31,

2012 2011

Cash $ 9,500 $ 11,000

Short-term investments 35,000 50,000

Accounts receivable 71,000 80,000

Allowance for doubtful accounts (4,000) (5,000)

Inventories 61,800 41,000

Prepaid insurance 0 2,000

Land 40,000 20,000

Buildings 140,000 140,000

Accumulated depreciationbuildings (20,000) (15,000)

Equipment 63,000 35,000

Accumulated depreciationequipment (23,000) (11,100)

Trademarks 25,000 0

$398,300 $347,900

Dec. 31, Dec. 31,

2012 2011

Accounts payable $ 46,500 $ 36,000

Short-term notes payable 15,000 10,000

Accrued payables 5,000 10,000

Mortgage payable 65,000 70,000

Capital stock 63,000 58,000

Additional paid-in capital 156,000 134,000

Retained earnings 47,800 29,900

$398,300 $347,900

Dividends in the amount of $30,000 were declared and paid in 2012.

Instructions From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale, and no unrealized gains or losses have occurred on these securities.