ACC 230 4.5. The following comparative balance sheets and income statement are available for Little Bit Inc

ACC 230 4.5. The following comparative balance sheets and income statement are available for Little Bit Inc

ACC 230 4.5Little Bit Inc

Create your own statement of cash flows for problem 4.5 on p. 141(ch.4). Include your completed statement of cash flows and a 200-300 word analysis of the statement.

4.5. The following comparative balance sheets and income statement are available for Little Bit Inc.

Prepare a statement of cash flows for 2009 using the indirect method and analyze the statement.
December 31,    
2009  2008
Cash                                                  $40,000      $24,000
Accounts receivable (net)                                  48,000           41,500
Inventory                                             43,000           34,500
Prepaid expenses                                        19,000           15,000     
Total Current Assets                                   $150,000      $115,000
Plant and equipment                                       $67,000      $61,000
Less accumulated depreciation                             (41,000)      (23,000)
Plant and equipment (net)                                  $26,000      $38,000
Long-term investments                                  90,000           89,000     
Total Assets                                        $266,000      $242,000
Accounts Payable                                        $13,000      $11,000
Accrued liabilities                                        55,000           71,000     
Total Current Liabilities                              $68,000      $82,000
Long-term debt                                        25,000           8,000
Deferred taxes                                             4,000           3,500     
Total Liabilities                                   $97,000      $93,500
Common stock ($1 par) and additional paid-in capital            112,000      97,000
Retained earnings                                        57,000           51,500
Total Liabilities and Equity                             $266,000      $242,000

Income Statement for 2009
Sales                                                             $155,000
Cost of goods sold                                                  83,000     
Gross profit                                                   $72,000
Selling and administrative                                 $45,000
Depreciation                                            18,000
     Operating Profit                                            63,700
Interest expense                                                  $8,300     
Earnings before tax                                             2,000
Tax expense                                                       $6,300
Net income                                                       $5,500