A. Karev Medical Supplies Comparative Balance Sheet December 31, 2008 and 2007

A. Karev Medical SuppliesComparative Balance SheetDecember 31, 2008 and 200720082007Increase/(Decrease)Current assets:Cash and cash equivelents$6,700$5,300$1,400Accounts receivable25,30026,900(1,600)Inventory91,80089,8002,000Plant Assets:Land89,00060,00029,000Equipment, net53,50049,4004,100Total Assets$266,300$231,400$34,900Current Liabilities:Accounts Payable$30,900$35,400$(4,500)Accrued Liabilities30,60028,6002,000Long-term Liabilities:Notes Payable75,000100,000(25,000)Stockholders’ equity:Common Stock88,30064,70023,600Retained Earnings41,5002,70038,800Total Liabilites and Stockholders’ equity$266,300$231,400$34,900Karev Medical SuppliesIncome StatementYear Ended December 31,2008Revenues:Sales Revenue$213,000Interest Revenue8,600Total Revenues$221,600Expenses:Cost of Goods Sold$70,600Salary Expense27,800Depreciation expense4,000Other operating expenses10,500Interest Expense11,600Income tax expense29,100Total expenses153,600Net Income$68,000A. Karevehad no noncash investing and financing transactions during 2008. During the year, A. Karev made no sales of land or equipment, no issuance of notes payable, no retirement of stock, and no treasury stock transactions.Requirements:1. Prepare the 2008 statement of cash flows, formatting operating activities by the indirect method.2. How will what you learned in this problem help you evaluate an investment?


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