Cash Flow Exercise

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6A:001 Introduction to Financial Accounting
Cash Flow Exercise

Required:
Following are the balance sheet and statement of cash flow as reported by Pro-Solutions Inc. for its fiscal year ending March 31, 2012. Using the information provided in the statement of cash flow, reconcile the March 31, 2011 balance sheet to the March 31, 2012 balance sheet using the T-accounts on the attached worksheet.

PRO-SOLUTIONS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

| March 31,| March 31,|
| 2012| 2011|
ASSETS| | |
Current assets:| | |
Cash and cash equivalents| $ 2,832| $ 3,755|
Accounts receivable, net of allowance for doubtful | | | accounts $1,132 in 2012 and $700 in 2011| 12,623| 15,112| Inventories, net of allowance for obsolete inventories| | | $3937 in 2012 and $3309 in 2011| 5,614| 9,174|

Prepaid expenses| 380| 666|
Deferred income taxes| 1,400| 4,062|
Total current assets| 22,849| 32,769|
Property and equipment, net of accumulated depreciation of| | | $18,035 in 2012 and $13,278 in 2011| 12,567| 15,807| Loan to related party| 200| --|
Other assets| 188| 189|
Total assets| $ 35,804| $ 48,765|
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY| | |
Current liabilities:| | |
Accounts payable| 6,207| 5,266|
Accrued liabilities| 5,995| 7,436|
Total current liabilities| 12,202| 12,702|
| | |
Preferred stock, $0.01 par value: Authorized: 10,000,000 shares| | | Issued and outstanding: none in 2012 and 2011| --| --| Common stock, $0.01 par value: Authorized: 50,000,000 shares| | | Issued and outstanding: 13,761,147 shares in 2011 and 2011| 138| 138| Additional paid-in capital| 65,928| 65,928|

Retained earnings (deficit)| (42,464)| (30,003)|
Total stockholders' equity| 23,602| 36,063|
Total liabilities and stockholders' equity| $ 35,804|...
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