Southwestern Rentals, Inc., rents equipment to customers ranging from homeowners to large construction companies. The financial information shown below was gathered from its accounting records for 2003. Assume any increase or decrease in the balances from 1/1/03 to 12/31/03 resulted from either receiving or paying cash in the transaction. For example, during 2003 the balance on loans for land holdings increased $150,000 because the company received$150,000 in cash by taking out an additional loan on the land.Balance as of Balance as of Items 1/1/2003 12/31/2003 Cash $20,000 $0,050,000 Cash receipts from customers 600,000 Loans on land holdings 100,000 250,000 Cash distributions to owners 150,000 Loan on building 100,000 70,000 Investments in securities 850,000 1,050,000 Cash payments for other expenses 50,000 Cash payments for taxes. 55,000 Cash payments for operating expenses 135,000 Cash payments for wages and salaries 100,000 1.Prepare a statement of cash flows for Southwestern Rentals, Inc., for the year ended December 31, 2003. 2. Interpretive Question: Does Southwestern Rentals, Inc., appear to be in good shape from a cash flow standpoint? What other information would help you analyze the situation?
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