Norwich Manufacturing, Inc. provided you with the following comparative balance sheets and income statement.

Norwich Manufacturing, Inc.

Income Statement

For the Year Ended December 31

Current Year

Sales……………………………………………..       $ 2,433,244

Cost of Goods Sold…………………………........     1,459,946

Gross Profit………………………………….........     $ 973,298

Selling, General, and Administrative Expenses…..     $ 59,800

Pension Expense…………………………………..    260,510

Bad Debt Expense………………………………...    1,650

Depreciation Expense……………………………..    19,470

Amortization Expense……………………………..   7,425

Total Operating Expenses…………………………    $ 348,855

Income before Interest and Taxes…………………   $ 624,443

Interest Expense…………………………………..    $ (55,110)

 Interest Revenue 0 Investment Income

(includes Gain on Sale)…………………………...     55,000

Equity Earnings from Affiliate Companies……….   164,500

Income before Tax…………………………………   $ 788,833

Income Tax Expense……………………………….  (301,873)

Net Income…………………………………………             $ 486,960

Additional Information:

1. Norwich sold investments with a cost of $ 55,000 at a gain of $ 40,500. It included this gain in investment income on the income statement.

2. The company acquired additional shares as investments to be carried at fair value. It accounted for all investments, other than investments carried under the equity method, as available-for-sale securities. It recorded a $ 9,000 unrealized loss for the current year.

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

4. The company sold equipment at book value.

5. Norwich did not increase its percentage ownership of its equity investee (affiliate company).

6. Norwich sold one of its franchises at book value.

7. Norwich signed a $ 100,000 promissory note issued by an equipment dealer in the acquisition of a plant asset.

8. The company did not borrow additional cash funds during the year. 9. Treat trading investments as an investing activity.

Required

Prepare Norwich Manufacturing’s cash flow statement for the current year using the indirect method. Present required disclosures.

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Norwich Manufacturing, Inc. Balance Sheets At December 31 Assets Current Year Pror Year Current Assets s 45000 22.000 2,000 58,000 Trading Investments at Fair Value Accounts Receivable, net Merchandise Inventory 95,000 135,000 95,000 S 333.000 254,000 Total Current Assets Noncurrent Assets Investments in Affiliate Companies Property, Plant, and Equipment net Intangible Assets net S 265,000 100,500 1530,500 97500125,000 S 1,717000 $1,756,000 $2,050,000 $2,010,000 1.364,500 , Total Noncurrent Assets Total Assets Liabilities Current Liabilities Current Portion of Long-term Debt Accounts Payable Dividends Payable Income Taxes Payable $ 25,000 65,800 128,500 187000 75,000 65,800 5500 Total Current Liabilities Noncurrent Liabilities Bonds Payable Less: Discount on Bonds Notes Payable Deferred Tax Liability Net Obligations under Pension Plans S 352,800 307800 00,000 400,000 128500) 145,000 225,500 62,500 225,000 Total Noncurrent Liabilities Total Liabilities 80,000 80.00 S 639,500 612,500 S 992,300 920,300 Shareholders' Equity S 135,000 135,000 400,000 523,700 48,500 Accumulated other Comprehensive Income(130,300) 79,500 $1,057,700 1,089,700 $2,050,000 $2,010,000 Common Stock, S1 par value Additional Paid-in Capital Retained Eamings Deferred Compensation 400,000 685,000 (32,000) Total Shareholders' Equity Total Liabilities and Shareholders' Equity