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Statement of cash flows

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Managerial accounting-statement of cash flows
SHORES INC.
Comparative Balance Sheet
December 31, Year 2, and Year 1

Yr. 2 Yr. 1
Assets
Cash $8 $18
Accounts receivable 355 233
Inventory 120 168
Prepaid expenses 12 5
Plant and equipment 612 475
Less accumulated depreciation (97) (88)
Long-term investments 17 22
Total assets $1,027 $833

Liabilities and Stockholders' Equity
Accounts payable $321 $225
Accrued liabilities 62 74
Bonds payable 288 174
Deferred income taxes 45 36
Common stock 205 254
Retained earnings 106 70
Total liabilities and stockholders' equity $1,027 $833

SHORES INC.
Income Statement
For the Year Ended December 31, Year 2

Sales $805
Cost of goods sold 502
Gross margin 303
Selling and administrative expenses 215
Net operating income 88
Nonoperating items:
Gain on sale of investments $7
Loss on sale of equipment 4 3
Income before taxes 91
Less income taxes 24
Net income $67

Equipment cost $20
Equipment sale 10
Accumulated depreciation on equipment 6
Long-term investment purchase 5
Long-term investment sale 12
Cash dividends 31

Check figure:
(1) Net cash provided by operating
activities $91

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Statement of Cash Flows: Time for change! SFAS No. 95

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As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?

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