The cash flow statement shows that in the fiscal year ended December 31, 2013 the company had net cash from operations of $55,250. This was derived from net earnings of $50,000 plus depreciation of $2,000 and increases in accounts payable, taxes payable, offset by decreases in accounts receivable and increases in inventory. The company spent $20,000 on new equipment and took on $5,000 in new notes payable, resulting in a net increase in cash of $40,250 for the year. The opening balance sheet shows the company had total assets of $102,000, with current assets of $80,000 including $50,000 cash and $20,

1. Cash Flow Statement Cash Flow From Operation Net Earning Additions to Cash Depreciation Decrease in Accounts Receivable Increase in Accounts Payable Increase in Taxes Payable Subtractions From Cash Increase in Inventory NET CASH FROM OPERATION Cash Flow Investing Equipment Cash Flow From Financing Notes Payable CaS Flow for FY Ended 31 DEC 2013 50,000 2,000 1,500 1,500 250 (1,500) 55,250 20,000 5,000 40,250 5,00

2. OPENING DAY BALANCE SHEET Mamma’s Pizzeria ASSETS Current Assets Cash in Bank $ 50,000 Inventory 20,000 Prepaid Expenses 10,000 Other - 0 Total Current Assets $ 80,000 Fixed Assets Machinery & Equipment $ 20,000 Furniture & Fixtures 2,000 Leasehold Improvements - 0 Real Estate / Buildings - 0 Other - 0 Total Fixed Assets $ 22,000 Other Assets Specify $ 0 Specify - 0 Total Other Assets $ 0 Total Assets $ 102,000 LIABILITIES & NET WORTH Current Liabilities Accounts Payable $ 10,000 Taxes Payable 5,000 Notes Payable (due within 12 months) 12,000 Current Portion Long-term Debt - 0 Other current liabilities (specify) - 0 Total Current Liabilities $ 27,000 Long-term Liabilities Bank Loans Payable (greater than 12 months) $ 50,000 Less: Short-term Portion 5,000 Notes Payable to Stockholders - 0 Other long-term debt (specify) - 0 Total Long-term Liabilities $ 55,000 Total Liabilities $ 82,000 Owners' Equity (Net Worth) $ 20,000 Total Liabilities & Net Worth $ 102,000