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			Charleigh, Inc.
			Income Statement
			For the Year Ended December 31, 2016
		Sales				$ 1,200,000
		Cost of Goods Sold				700,000
		Gross Margin				500,000
		Operating Expenses
		Wage Expense				266,500
		Rent Expense				48,000
		Depreciation Expense				30,000
		Bad Debt Expense				5,000
		Total Operating Expenses				349,500
		Operating Income				150,500
		Other Revenues & (Expenses)
		Loss on Sale of Equipment				-1,000
		Interest Expense				-9,500
		Total Other Revenue and (expenses)				-10,500
		Taxable Income				140,000
		Tax Expense				42,000
		Net Income				$ 98,000
		EPS				17,04
				Charleigh, Inc.
				Income Statement
				For the Year Ended December 31, 2016
		2016		2015				2016		2015
	Assets						Liabilities
Current Assets						Current Liabilities
Cash		$ 108,000		$ 150,000		Acct. Payable		$ 78,000		$ 109,000
Acct. Receivale		80,000		85,000		Wages Payable		13,500		8,000
Less: ADA		-10,000		-5,000		Interest Payable		4,500		5,000
Net Acct Receivable		70,000		80,000		Taxes Payable		8,000		20,000
						Current Portion of LTD		10,000		10,000
						Total Current Liabilities		114,000		152,000
Inventory		110,000		90,000
Total current Assets		288,000		320,000		Long-Term Debt
Property & Equipment						Note Payable		90,000		100,000
Equipment		420,000		340,000		Total Liabilities		204,000		252,000
Less:Accumulate Dep		-88,000		-60,000
Net Property & Equip		332,000		280,000
Other Assets							Owners' Equity
Security Deposit		12,000		10,000
						Common Stock ($1 Par)		6,000		5,000
Total Assets		$ 632,000		$ 610,000		Paid In Capital		54,000		45,000
						Retainrd Earnings		368,000		308,000
						Total Owners' Equity		428,000		358,000
						Owner's Equity		$ 632,000		$ 610,000
Some of the equipment was acquired on March 31, 2016 by exchanging 500 shares of common stock worth $5,000. the additional shares of
common stock were issued on September 30, 2016. The Note Payable requires payment of $10,000 per year plus interest at 10%. The
company sold a piece of equipment during the year that originally cost $8,000 and had accumulated depreciation to the date of sale of
$2,000 for $5,000.

b). Prepare the Operating Cash Flow Section of the cash flow statement for Charleigh using the direct method.

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