The Khan Group provided its balance sheet and income statement as of December 31 of the current year.

                           The Khan Group

                        Income Statement

            For the Year Ended December 31

                             Current Year

Sales…………………………………………………             $ 2,212,040

Cost of Goods Sold…………………………………                          1,327,224

Gross Profit………………………………………….            $ 884,816

Selling, General, and Administrative Expenses……..             $ 43,000

Unrealized Losses……………………………………            $ 3,600

Pension Expense……………………………………..            210,500

Bad Debt Expense…………………………………...             1,500

Depreciation Expense………………………………..            17,700

Amortization Expense……………………………….           6,750

Total Operating Expenses……………………………           $ 283,050

Income before Interest and Taxes……………………          $ 601,766

Interest Expense……………………………………..            $ (50,100)

Investment Income (includes gain on sale)………….             50,000

Equity Earnings from Affiliate Companies………….           118,500

Income before Tax…………………………………...            $ 720,166

Income Tax Expense…………………………………           (288,066)

Net Income…………………………………………..           $ 432,100

Additional Information:

1. The company classifies its current investments as trading securities. It sold securities with a cost of $ 34,500 during the current year. Treat the trading securities as an investing activity.

2. The company reported accounts receivable net of the allowance for bad debts.

3. The company acquired equipment during the year and made no disposals. Paid cash.

4. The company included a $ 40,500 gain on the sale of investments in investment income on the income statement.

5. The change in accumulated other comprehensive income is due to pension adjustments.

6. There were no additional investments in affiliate companies during the year.

Required:

Prepare the company’s cash flow statement for the current year under the indirect method. Provide all required disclosures.

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The Khan Group Balance Sheets At December 31 Assets Current Year Prior Year Current Assets S 15,000 12,000 30,000 35,000 105,000 115,000 S 221.000 S 192000 Trading Investments at Fair Value Accounts Receivable, net Merchandise Inventory 36,000 65,000 Total Current Assets Noncurrent Assets Investments in Affiliate Companies Property, Plant, and Equipment- net Intangible Assets-net S 161,500 100,500 1,533,050 1,128,580 88,000 $1.789,750 S 1,317090 $2,010,750 S1,509,080 Total Noncurrent Assets Total Assets Liabilities Current Liabilities Current Portion of Long-term Debt Accounts Payable Dividends Payable Income Taxes Payable S 6,000 4,500 92,500 87500 5,000 28,500 300 Total Current Liabilities Noncurrent Liabilities Bonds Payable Less: Disoount on Bonds Notes Payable Deferred Tax Liability Net Obligations under Pension Plans S 127000 127000 S 425,000 (87500 52,500 425,000 100,250 45,000 22,630 $ 438,750 358,630 S 565,750 485,630 Total Noncurrent Liabilities Total Liabilities Shareholders' Equity $ 60,000 50,000 135,000 781,850 (12,900) Accumulated other Comprehensive Income75,000 69,500 $1,445,000 $1,023,450 $2010 750 1.509.090 Cammon Stock, $1 parvalue Additional Paid-in Capital Retained Earnings Deferred Compensation 145,000 1.175,000 (10,000 Total Shareholders' Equity Total Liabilities and Shareholders' Equity