Complete a cash flow statement for the company using:

1. Proper header. The blow headers are not proper.

2. By the indirect method.

3. With T-accounts clearly marked and completed for transactions.

4. Include any assumptions you make in the calculations.

			Balance Sheets
				Dec 31 X2				Dec 31 X1
Cash				$ 200,000				$ 90,000
Cash Equivalents				$ 4,000				$ 6,000
Accounts Receivable				$ 180,000				$ 108,000
Merchandise Inventory				$ 192,000				$ 240,000
PPE			$ 304,000				$ 480,000
Accumulated Depreciation			$ (160,000)	$ 144,000			$ (152,000)	$ 328,000
Total Assets				$ 720,000				$ 772,000
Accounts Payable				$ 88,000				$ 48,000
Income Taxes Payable				$ 170,000				$ 196,000
Deferred Income Taxes				$ 6,000				$ -
Bonds Payable			$ 200,000				$ 340,000
Discount on Bonds Payable			$ 20,000	$ 180,000			$ 40,000	$ 300,000
Common Stock				$ 108,000				$ 108,000
Retained Earnings				$ 168,000				$ 120,000
				$ 720,000				$ 772,000
			Income Statement for X2
Sales				$ 4,200,000
CGS				$ 3,576,000
Gross Profit				$ 624,000
Selling Expenses			$ 300,000
General and Administrative			$ 96,000	$ 396,000
Income from operations				$ 228,000
Interest Expense				$ 36,000
Income before taxes				$ 192,000
Income taxes				$ 48,000
Net income				$ 144,000

Additional information:

1. Dividends for the year were $96,000.

2. During the year, equipment was sold for $120,000. This equipment cost $176,000 originally and had a book value of $144,000. This loss is improperly put in cgs.

3. Depreciation expense is in selling expense and this is proper.

4. HINT1: write down the JE for deferred taxes that gets you to the new balances in the tax accounts. What part of it must reflect payment of taxes?

5. HINT2: Reviewing the Discount on bonds balances, what must be the interest expense that is not from cash flow? This is an adjustment in operating