The following comparative balance sheets and income statement are available for Little Bit Inc. Prepare a statement of cash flows for 2012 using the indirect method and analyze the statement.
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December 31, 2012
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December 31, 2011
|
|
Cash
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$ 40,000
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$ 24,000
|
|
Accounts receivable (net)
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48,000
|
41,500
|
|
Inventory
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43,000
|
34,500
|
|
Prepaid expenses
|
19,000
|
15,000
|
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Total Current Assets
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$150,000
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$115,000
|
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Plant and equipment
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$ 67,000
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$ 61,000
|
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Less accumulated depreciation
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(41,000)
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(23,000)
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Plant and equipment (net)
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$ 26,000
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$ 38,000
|
|
Long-term investments
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90,000
|
89,000
|
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Total Assets
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$266,000
|
$242,000
|
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Accounts payable
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$ 13,000
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$ 11,000
|
|
Accrued liabilities
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55,000
|
71,000
|
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Total Current Liabilities
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$ 68,000
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$ 82,000
|
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Long-term debt
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25,000
|
8,000
|
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Deferred taxes
|
4,000
|
3,500
|
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Total Liabilities
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$ 97,000
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$ 93,500
|
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Common stock ($1 par) and additional paid-in capital
|
112,000
|
97,000
|
|
Retained earnings
|
57,000
|
51,500
|
|
Total Liabilities and Equity
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$266,000
|
$242,000
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Income Statement for 2012
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Sales
|
|
$155,000
|
|
Cost of goods sold
|
|
83,000
|
|
Gross profit
|
|
$ 72,000
|
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Selling and administrative
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$ 45,700
|
|
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Depreciation
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18,000
|
63,700
|
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Operating profit
|
|
$ 8,300
|
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Interest expense
|
|
2,000
|
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Earnings before tax
|
|
$ 6,300
|
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Tax expense
|
|
800
|
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Net income
|
|
$ 5,500
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