Assume the following: Notes payable are not related to amounts owed to regular suppliers die to regular operations.

1. Assume the following:  Notes payable are not related to amounts owed to regular suppliers die to regular operations.  Changes in Property,Plant, and Equipment accounts did involve cash.  The only changes in accumulated depreciation were due to Depreciation Expense.  Changes in Stockholder's Equity accounts involved cash.  The dividends were cash dividends declared and paid during the year

Based upon this information, complete, in good form, the following for the fiscal year ended 12/31/2003.

1.  A schedule for the calculation of cash generated from operating activities under the direct method.

2.  The complete Statement of Cash Flows by the direct method.

3.  The Operating Activities section of the Statement of Cash Flows by the indirect method

Comparative Balance Sheet

December 31, 2003, and 2002

ASSETS

Current Assets:  2003  and  2002

Cash   $201,197             $212,000

Government Notes (cash equivalent)    $5700      $ 20,000

Interest Recievable  $285     $700

Accounts Recievable  $535800   506,000

Merchandise inventory   $613,394      $675,120

Supplies and Prepayments     $38,143    $27,356

Total Current Assets   $1,394,519     $1,441,176

Property, Plant, and Equipment

Store Equipment   $456,000      $388,000

Less Accum. Depr.-Store Equipment   $(171,000)      $(140,000)

Delivery Equipment   $427,500      $320,000

Less Accum. Depr.-Delivery Equipment   $(118,750)    $(80,000)

Office Equipment  $361,000     $339,900

Less Accum. Depr.-Office Equipment  $(76,000)    $(61,000)

Total Property,Plant, and Equipment  $878,750     $766,900

Total Assets  $2,273,269   $2,208,076

LIABILITIES

Current Liabilities:  2003 and 2002

Notes Payable  $73,241   $118,000

Accounts Payable  $230,153    $384,470

Payroll Taxes Payable  $9,300    $15,200

Interest Payable  $899   $800

Total Liabilities  $313,593   $518,470

STOCKHOLDER'S EQUITY

Common Stock  $990,000   $980,000

Paid-in-Capital in Excess of Par-common st  $390,500   $390,000

Retained Earnings  $579,176   $319,606

Total Stockholder's Equity      $1,959,676     $1,689,606

Total Liabilities and Stockholder's Equity  $2,273,269   $2,208,076

Income Statement (December 31, 2003)

Net Sales  $2,687,750

Cost of Goods Sold  $(1,264,673)

Gross Profit  $1,423,077

Operating Expenses  $(1,035,528)

Operating Income  $387,549

Other Revenues and Expenses

Interest Revenue  $1008

Interest Expenses $(4187)   $(3179)

Net Income  $384,370

Statement of Retained Earnings (December 31,2003)

Retained Earnings, January 1          $319,606

Net Income   $384,370

Less Dividends $(124,800)

Net Increase in Retained Earnings   $259,570

Retained Earnings,December 31  $579,176