Championship Boxing, Inc. is a small manufacturer of cardboardboxes of all sizes. You have reported for your first day of work,and the company is in an uproar. Yearly financial statements arebeing prepared, but a computer malfunction of the company’s newBOX-9000 computer has inadvertently erased parts of the company’sbalance sheet, along with almost all related data except thecompany’s statement of cash flows. The IT department is working toretrieve earlier backups, but estimates that the reconstruction ofthe data will take about 24 hours. Unfortunately, financialstatements are to be presented at a stockholders’ meeting in onehour. The company uses the indirect method to prepare its statementof cash flows (rather than the direct method), so your newsupervisor believes the missing data for the balance sheet can beprepared using the statement of cash flows. You are assigned thistask, since you were top student in your business school class.Meanwhile, the supervisor will go to the stockholders’ meeting andgive some introductory remarks. In addition to the statement ofcash flows, the following data survived the computer mishap: A. Theinvestments were sold for $280,000 cash. B. Equipment was acquiredfor $152,000 cash. C. Land was acquired for $326,000 cash. D. Therewere no disposals of equipment during the year. E. 12,500 shares ofcommon stock were sold for cash during the year. F. There was a$96,000 debit to Retained Earnings for cash dividends declared.

Using the information on previous panels, complete the followingcomparative balance sheet.

Championship Boxing, Inc.

Comparative Balance Sheet

December 31, 20Y8 and 20Y7

1		Dec. 31, 20Y8	Dec. 31, 20Y7
2	Assets
3	Cash		$585,920.00
4	Accounts receivable (net)	230,950.00
5	Inventories		618,420.00
6	Investments	0.00
7	Land		0.00
8	Equipment	705,120.00
9	Accumulated depreciation-equipment	(166,400.00)
10	Total assets
11
12	Liabilities
13	Accounts payable (merchandise creditors)		$391,830.00
14	Accrued expenses payable (operating expenses)	41,160.00
15	Dividends payable		19,200.00
16	Total liabilities	$498,060.00
17
18	Stockholders’ Equity
19	Common stock, $4 par		100,000.00
20	Paid-in capital in excess of par		280,000.00
21	Retained earnings	1,290,930.00
22	Total stockholders’ equity	$1,858,430.00
23	Total liabilities and stockholders’ equity

Your supervisor has provided you with the following statement ofcash flows, prepared using the indirect method. Recall that thestatement of cash flows consists of three sections: cash flows fromoperating activities, cash flows from investing activities, andcash flows from financing activities. Review the statement, andthen proceed to the next panel.

Championship Boxing, Inc.

Statement of Cash Flows

For the Year Ended December 31, 20Y8

1	Cash flows from operating activities:
2	Net income	$186,540.00
3	Adjustments to reconcile net income to net cash flow fromoperating activities:
4	Depreciation	18,400.00
5	Gain on sale of investments	(50,000.00)
6	Changes in current operating assets and liabilities:
7	Increase in accounts receivable	(25,370.00)
8	Increase in inventories	(33,350.00)
9	Increase in accounts payable	41,070.00
10	Decrease in accrued expenses payable	(12,460.00)
11	Net cash flow from operating activities		$124,830.00
12	Cash flows from investing activities:
13	Cash received from sale of investments	$280,000.00
14	Cash paid for purchase of land	(326,000.00)
15	Cash paid for purchase of equipment	(152,000.00)
16	Net cash flow used for investing activities		(198,000.00)
17	Cash flows from financing activities:
18	Cash received from sale of common stock	$187,500.00
19	Cash paid for dividends	(91,200.00)
20	Net cash flow from financing activities		96,300.00
21	Change in cash		$23,130.00
22	Cash at the beginning of the year		585,920.00
23	Cash at the end of the year		$609,050.00