Answer and Explanation:
The preparation of the partial cash flow statement is shown below:
Cash flow from operating activities
Net income $300,000
Add: Depreciation expense $25,000
Less: Increase in accounts receivable -$75,000
Add: Decrease in inventory $15,000
Add: Amortization of patent $4,000
Add: Increase in accounts payable $7,500
Add: Decrease in interest receivable $4,000
Less: Increase in prepaid insurance -$7,000
Less: Decrease in income taxes payable -$2,000
LesS: Gain on disposal of plant assets -$10,000
Net cash provided (used) by operating activities $261,500
