PROBLEM # 2 Condensed financial data of Fulton Corp. for 2008 and 2007 are presented below. FULTON CORP.

PROBLEM # 2Condensed financial data of Fulton Corp. for 2008 and 2007 are presented below.FULTON CORP.COMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2008 AND 20072008 2007Cash $800 $600 Investments 0 200 Receivables 2,250 2,100 Inventory 1,600 1,200 Plant assets 1,600 1,200 Accumulated depreciation (600) (455)$5,650 $4,845 Accounts payable $750 $1,200 Accrued liabilities 330 520 Bonds payable 800 1,000 Capital stock 1,500 1,400 Retained earnings 2,270 725 $5,650 $4,845 FULTON COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2008Sales $15,200 Cost of goods sold 10,400Gross profit 4,800Selling and administrative expenses 1,205Income from operations 3,595 Other revenues and gainsLoss on sale of investments _50 Income before income tax 3,545 Income tax expense 1,400 Net income 2,145 Cash dividends 600Income retained in business $1,545 Additional information:During the year, $100 of common stock was issued in exchange for land. No plant assets were sold in 2008.InstructionsPrepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

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