Selected financial statement information is reported on the shown below for Beltway Distributors, Inc.

Required

A. Prepare a statement of cash flows (indirect format) for Beltway Distributors, assuming that all important cash flow activities are reflected in the information provided.

B. Assume this has been the pattern of cash flows for several years. What does this imply about the firm’s business situation?

For the Fiscal Year Ended January 30, 2004

(In thousands)

Sales revenue ..............$35,400

Cost of goods sold ............ 22,700

Operating expenses (except depreciation) ... 4,500

Depreciation expense ........... 2,900

Net income .............. 5,300

Dividends declared and paid ....... 5,000

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For January 30 2004 2003 Cash Accounts receivable Inventories Accounts payable Bank loan payable $ 2,050 8,600 23,500 8,600 18,700 1,950 13,400 27,100 8,800 30,000