Answer:
Explanation:                
Given Data:
                                                         December 31 
                                                    2019                    2020
Cash                                        $38,000              $65,500
Accounts receivable (net)       84,000               144,000 
Inventory                                  169,000             205,000 
Land                                         57,000               19,000 
Equipment                               505,000            787,000 
TOTAL                                     $853,000          $1,220,500 
Accumulated depreciation      $86,000          $117,000 
Accounts payable                     51,000             87,000 
Notes payable - short-term      66,000            30,000 
Notes payable - long-term       169,000           300,000 
Common stock                          415,000           483,000 
Retained earnings                    66,000             203,500 
TOTAL                                       $853,000        $1,220,500
Additional data for 2020: 
1. Net income was $219,000. 
2. Depreciation was $31,000. 
3. Land was sold at its original cost. 
4. Dividends of $81,500 were paid. 
5. Equipment was purchased for $83,000 cash. 
6. A long-term note for $199,000 was used to pay for an equipment purchase. 
7. Common stock was issued to pay a $68,000 long-term note payable.
                               Statement of cash flows
                     For the year ending December, 2020
Cash flows from operating activities:
Net income                                                                                 $219,000
Adjustments to reconcile net income to
net cash flows from operating activities:
Add:
Depreciation expenses                                          $31,000
Increase in account payable (87,000-51,000)      $36,000 
Less:
Increase in account receivable(84,000-144,000) -$60000        
Increase in inventory (169,000 - 205,000)           -$36000       
Decrease in note payable-long term                      $0
(300,000- 169,000 - $199,000 + $68,000)     
Decrease in note payable- short term                  -$36,000
(30,000 -66,000)
Net cash flow from operating activities                                  <u>-$65,000</u>   
----------------------------------------------------------------------------------    154,000                        
Cash flow from investing activities:
Land sold ( 57,000- 19,000)                                $38,000
Equipment purchase                                          <u> -$83,000</u>    -$45000
Cash flow from financing activities:
Dividend paid                                                                                           -$81,500 
Net increase in cash                                                                  $27,500
Add: Beginning cash balance                                                            $38,000
Ending cash balance                                                                  $65,500