Acc230 Financial Accounting: P4-5 The following comparative balance sheets (Little Bit Inc)

Acc230 Financial Accounting 
Week 5 Checkpoint 
Problem 4-5 
The following comparative balance sheets and income statement are available for Little Bit Inc. 
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 45,700 
Depreciation 18,000 63,700 
Operating Profit 8,300 
Interest expense 2,000 
Earnings before tax 6,300 
Tax expense 800 
Net Income $5,500 

Prepare a statement of cash flows for 2009 using the indirect method and analyze the statement. 
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