Rocky Mountain Chocolate Factory manufactures an extensive line of premium chocolate candies for sale at its franchised and company-owned stores in malls throughout the United States. Its balance sheet for the first quarter of 1996 is presented along with an analysis of selected accounts and transactions:

Analysis of Selected Accounts and Transactions

a. Net income was $163,837. Notes and accounts receivable due after one year relate to operations.

b. Depreciation and amortization totaled $282,205.
C. No "other" noncurrent assets (which relate to investing activities) were purchased this period.

d. No property, plant, and equipment were sold during the period. No goodwill was acquired or sold.

e. Proceeds from issuance of long-term debt were $4,659,466 and principal payments were $2,355,029. (Combine the current maturities with the long-term debt in your analysis.)

f. No dividends were declared or paid.
g. Ignore the "deferred tax asset" and "deferred income taxes" liability accounts.
Required:
Prepare a statement of cash flows, indirect method, using the schedule approach.

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ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. Balance Sheets Assets CURRENT ASSETS Cash and cash equivalents Accounts and notes receivable-trade, less allowance for doubtful accounts of $43.196 at May 31 and $28,196 at February 29 Inventories Deferred tax asset Other May 31. 1996 (Unaudited) February 29, 1996 $ 921.505 $ 528.787 1,602,582 2.748,788 1.463.901 2.504.908 59.219 59.219 581.508 224.001 Total current assets 5.913.602 4.780.816 PROPERTY AND EQUIPMENT-AT COST Less accumulated depreciation and amortization 14.010.796 12.929.675 -2.744.388 -2.468.084 11.266,408 10.461.591