Answer and Explanation:
The preparation of the statement of cash flows is presented below:
Cash flows from operating activities
Net income $13,500
Add: depreciation expense $8,700
Add: loss on sale of equipment $2,200
Less: increase in inventory $3,900
Less: increase in prepaid expense -$800
Add: decrease in account receivable $1,700
Net cash provided by operating activities $19,900
Cash flows from investing activities
receipt from sale of equipment, $2,700
Less: payment for purchase of building, $29,000
Net cash used by investing activities -$26,300
Cash flows from financing activities
receipt from issuance of bonds, $8,000
Less: payment of dividends, $5,200
Net cash provided by financing activities $2,800
Net decrease in cash -$3,600
Add: opening cash balance $10,200
Ending cash balance $6,600
