?oSee, I told you things would work out,?? said Barry Kresmier, president of Lomax Company. ?oWe expanded sales from $1.6 million to $2.0 million in 2009, nearly doubled our warehouse space, and ended the year with more cash in the bank than we started with. A few more years of expansion like this and we’ll be the industry leaders.?? ?oYes, I’ll admit our statements look pretty good,?? replied Sheri Colson, the company’s vice president. ?oBut we’re doing business with a lot of companies we don’t know much about and that worries me. I’ll admit, though, that we’re certainly moving a lot of merchandise; our inventory is actually down from last year.?? A comparative balance sheet for Lomax Company containing data for the last two years follows:

The following additional information is available about the company’s activities during 2009:
Cash dividends declared and paid to the common stockholders totaled $75,000.
Long-term notes with a value of $380,000 were repaid during the year.
Equipment was sold during the year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale.
Long-term investments were sold during the year for $1 10,000. These investments had cost $50,000 when purchased several years ago.
The company’s income statement for 2009 follows:

Required:
Prepare a worksheet like Exhibit 15—9 for Lomax Company.
Using the indirect method, prepare a statement of cash flows for the year 2009.
What problems relating to the company’s activities are revealed by the statement of cash flows that you haveprepared?