Financial statement data for Comfort Shoes Company for 2011 follow:
COMFORT SHOES COMPANY
Comparative Statement of Financial Position

COMFORT SHOES COMPANY
Statement of Earnings
For the year ended December 31, 2011

Additional information:
1. Old equipment with an original cost of $40,000 and a net book value of $10,000 was sold for cash.
2. New equipment was purchased for cash.
3. The transactions that affected the mortgage payable and share capital accounts were cash transactions.
4. Dividends were declared and paid during the year.
Required:
a. Prepare a statement of cash flows for Comfort Shoes Company for the year ended December 31, 2011.
b. Briefly comment on the most significant information revealed by the statement of cash flows that you prepared for Comfort Shoes.

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Dec. 31, 2011 Dec. 3, 2010 Assets $97.000 32.000 135,000 40,000 304,000 420,000 (168,000) 252,000 $556,000 $ 94.000 26,000 90,000 42,000 252,000 370,000 (129,000 41,000 $493,000 Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Accumulated depreciation Total non-current assets Total assets Liabilities and shareholders equity 31,000 3,000 9,000 43,000 90,000 133,000 200,000 223,000 423,000 S 35,000 2,000 5,000 42,000 120,000 162.000 140,000 191.000 331,000 493.000 Accounts payable Interest payable Income tax payable Total current liabilities Mortgage payable Total liabilities Share capital Retained earnings Total shareholders equity Total liabilities and shareholders' equity $556,00 Sales Gain on sale of equipment $970,000 6,000 $976,000 Expenses Cost of goods sold Wages expense Utilities expense $550,000 95,000 160,000 Depreciation expense Interest expense Total expenses Net earnings 69,000 6,000 880,000 96,000