Q No 2: Prepare cash flow statement using indirect method with classification of operating, investing, and financing. A) ADC CO. Balance Sheets Account 2000 1999 Cash $100,000 S130,000 Accounts Receivable 420,000 460,000 Inventory 800,000 700.000 Prepaid Rent 70,000 50,000 PP &E 1,000,000 800,000 Total Assets S2,390,000 S2,140,000 Accounts Payable Accrued Wages Stockholders Equity Total Liab & S.E. $300,000 175,000 1,915,000 S2,390,000 $360,000 120.000 1,660,000 S2,140,000 ABC Co.'s Income Statement 2000 Sales S5,000,000 Cost of Goods Sold 3,500,000 Gross Margin $1,500,000 Rent Expense Wage Expense Depreciation Expense Net Income $240,000 800,000 150,000 S310.000 2000 1999 B) (Ctrl) Cash Accounts receivable Prepaid insurance Inventory Fixed assets Accumulated Depreciation Total assets Accounts payable Wages payable Note payable Capital stock Retained earnings Total Liabilities & Equity Sales Cost of goods sold Depreciation expense Insurance expense Wage Expense Net Income $4,000 $14,000 25,000 32,500 5.000 7.000 37.000 34,000 316.000 270,000 (45.000) (30,000) 342.000 327.500 $18,000 $16,000 4,000 7.000 173,000 160,000 88,000 84.000 59.000 60,500 342.000 327.500 2000 $200,000 (123,000) (15,000) (11.000) (50.000) 1.000