Los Lobos Ledger Preparation Review the following information:

1. Los Lobos Ledger Preparation

Review the following information:

12-31-2007 12-31-2006
Cash $ 35,000 $ 32,000
Accounts receivable 33,000 30,000
Allowance for doubtful accounts (1,300) (1,100)
Inventory 31,000 47,000
Property, plant, & equipment 100,000 95,000
Accumulated depreciation (16,500) (15,000)
Trade accounts payable (25,000) (15,500)
Income taxes payable (21,000) (29,100)
Deferred income taxes (5,300) (4,600)
8% callable bonds payable (45,000) (20,000)
Unamortized bond discount 4,500 5,000
Common stock (50,000) (40,000)
Additional paid-in capital (9,100) (7,500)
Retained earnings (25,200) (64,600)
Sales (558,300) (778,700)
Cost of goods sold 250,000 380,000
Selling expenses 141,500 172,000
General and administrative expenses 137,000 151,300
Interest expense 4,300 2,600
Income tax expense 20,400 61,200
$ - $ -

Additional information:
1. Los Lobos purchased $5,000 in equipment during 2007.
2. Los Lobos allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses.
3. Bad debt expense for 2007 was $5,000, and write-offs of uncollectible accounts totaled $4,800.
4. $12,000 of the debt is current portion.

Cash Sales $72,600
Collections on Receivables 477,900
Purchases (219,500)
Purchase of Equipment (5,000)
Wages (150,700)
Payments to Suppliers (126,300)
Tax Payments (27,800)
Borrowing 30,000
Repayment of Debt (5,000)
Interest Payments (3,800)
Sale of Stock 11,600
Dividends (51,000)

Prepare a statement of cash flows using the direct and indirect methods.
Prepare a classified balance sheet.