Income Before Income Tax 2.00% Tax Expense (50%) 1.00% 1.00% Net Income Additional Information for the Year 2021: Poco Lo, Co. is a merchandiser of single-priced, wooden cabinets and no other products. Based on the horizontal and trend analysis made for accounts balances as of December 31, 2020, and 2021, the following overall changes were observed: Changes Increased by 12.5% Account Name Cash Marketable Securities Increased to 125% Decreased by 10% Decreased by 6.25% Decreased by 12.5% Increased to 120% Accounts Receivable Inventories Land Equipment Accumulated Depreciation - Equipment Building Accumulated Depreciation – Building Accounts Payable Wages Payable Taxes Payable Bonds Payable Retained Earnings Increased by 1/6 No Change Increased by 1/6 Increased to 110% Increased by 5% Decreased by 2/3 No Change Decreased by 19.25% Upon inspection of the company's records, 250 common stocks were issued for cash for the year and the company did not repurchaseany of its common stock within the year. The company did not issue any new bonds nor retired any of the existing bonds during the year. Aside from the land sold, no other noncurrent assets were disposedof within the year. Pieces of equipment were purchased within the year and no other acquisition was made. Cash Dividends were declared and paid within the year. Gross Profit for the period is equal to $30,625.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).