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The following information is taken from the records of "Past Lives" Company

Required: Create a Cash Flow Statement in good form

Balance Sheets for years $1$ and $2$

Year $1$ Year $2$

Assets

Cash $1,2001,000$

Accounts Receivable $1,6001,840$

Inventory $1,2001,520$

Prepaid Insurance $24080$

Total Current Assets $4,2404,440$

Property, Plant, and Equipment $4,0005,840$

less: Accumulated Depreciation $-800-1,040$

Total Fixed Assets $3,2004,800$

Total Assets $7,4409,240$

Liabilities and Equities

Accounts Payable $1,4401,680$

Accrued Expenses Payable $560240$

Income Taxes Payable $160240$

Dividends Payable $0160$

Total Current Liabilities $2,1602,320$

Bonds Payable $400880$

Total Liabilities $2,5603,200$

Common Stock $800880$

Paid in Capital $2,4002,720$

Retained Earnings $1,6802,440$

Total Stockholders' Equity $4,8806,040$

Total Liabilities and Stockholders Equity $7,4409,240$

Statement of Income and Retained Earnings for Year $2$

Year $2$

Revenue $9,840$

Cost of Goods Sold $5,520$

Gross Profit $4,320$

Operating Expenses

Insurance Expense $480$

Other operating expenses $1,120$

Depreciation $640$

Total Operating Expenses $2,240$

Operating Income $2,080$

Loss on Sale of Fixed Asset $-120$

Income before Taxes $1,960$

Income Tax Expense $800$

Net Income $1,160$

plus: Retained Earnings for Year $11,680$

$2,840$

less: Dividends Declared $-400$

Retained Earnings for Year $22,440$

NOTE: Property, Plant and Equipment purchased during the year: $2,520$

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