The following items relate to the preparation of a statement of cash flows:

2006

2005

2006

Cash

$150,000

$100,000

Net sales

$3,200,000

AR–net

420,000

290,000

CGS

(2,500,000)

Merchandise inventory

330,000

210,000

Expenses

(500,000)

AP

265,000

220,000

Net income

$ 200,000