Complete the Statement of Cash Flow below using the indirect method.

Statement of Cash Flows for the Year Ended December 31, 2008

Net income

Adjustments to reconcile Net Income

Operating Activities

Credit card receivables

Accounts receivable

Inventory

Marketable securities

Prepaid expenses

Accounts payable

Accrued expenses payable

Income taxes payable

Current mortgage payable

Depreciation, building

Depreciation, furniture and equipment

Net adjustments to reconcile Net Income

Net cash flow, operating activities

Investing Activities

Purchased furniture and equipment

Net cash flow, investing activities

Financing Activities

Reduced long-term mortgage

Cash dividends paid

Net cash flow, financing activities

Net cash flow increase

Cash balance, December 31, 2007

Cash balance, December 31, 2008

Balance Sheet

2007

2008

Assets

Current Assets

Cash

$4,100

$5,200

Credit card receivables

4,700

5,500

Accounts receivable

1,200

700

Inventory

3,000

3,600

Marketable securities

8,000

7,000

Prepaid expenses

1,200

1,500

Total Current Assets

$22,200

$23,500

Property, Plant & Equipment

Land

$30,000

$30,000

Building

150,000

150,000

less: accum. Depr, building

(41,900)

(50,200)

Furniture & equipment

22,700

25,400

less: accum. Depr, furniture & equip.

(15,400)

(19,100)

Total Property, Plant & Equipment

$145,400

$136,100

Total Assets

$167,600

$159,600

Liabilities & Stockholders' Equity

Current Liabilities

Account payable

$6,900

$7,000

Accrued expenses payable

1,400

1,700

Income taxes payable

2,000

1,500

Current portion of mortgage payable

11,500

10,400

Total Current Liabilities

$21,800

$20,600

Long-term Liabilities

Long-term mortgage payable

100,000

89,600

Total Liabilities

$121,800

$110,200

Stockholders' Equity

Capital stock, common

23,000

23,000

Retained earnings

22,800

26,400

Total Stockholders' Equity

$45,800

$49,400

Total Liabilities & Stockholders' Equity

$167,600

$159,600

Income Statement for Year Ended December 31, 2008

Sales revenue

$204,900

Operating costs

(173,800)

EBITDA

31,100

Depreciation, building

(8,300)

Depreciation, furniture and equipment

(3,700)

EBIT

$19,100

Interest

(10,800)

Operating income

$8,300

Income tax

(1,500)

Net Income

$6,800

Statement of Retained Earnings

For Year Ended December 31, 2008

Retained earnings, Dec. 31, 2007

$22,800

Add: Net income for year 2008

6,800

Subtotal

$29,600

Deduct: Dividends paid in 2008

(3,200)

Retained earnings, Dec. 31, 2008

$26,400