Effects of Changes in Receivable Balances on Statement of Cash Flows St. Charles Antique Market reported a net loss of $6,000 for the year ended December 31, 2010. The following items were included on St. Charles Antique Market€™s balance sheets at December 31, 2010 and 2009:
St. Charles Antique Market uses the indirect method to prepare its statement of cash flows. It does not have any other current assets or current liabilities and did not enter into any investing or financing activities during 2010.

Required
1. Prepare St. Charles Antique Market€™s 2010 statement of cash flows.
2. Draft a brief memo to the owner to explain why cash increased during such an unprofitable year.

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12/31/10 12/31/09 Cash Accounts receivable Notes receivable $ 36,300 79,000 112,600 S 3,100 126,000 104,800