Answer and Explanation:
The preparation of the cash flow statement is presented below:
Cash Flows From Operating Activities
Net Income $497,175
Adjustments made:
Less: Increase in Accounts Receivable -$14,350
Less: Increase in Inventory -$19,250
Less: Decrease in accounts payable -$6,475
Add: Increase in Income tax payable $8,225
Add: Depreciation Expense $283,500
Net Cash Provided by Operating Activities (A) 748,825
Cash Flows From Investing Activities
Cash received for sale of land at book value $61,250
Less: Cash used to purchase a building -$505,750
Net Cash Provided by Investing Activities (B) -$444,500
Cash Flows From Financing Activities
Cash received from issuing bonds $350,000
Less: Cash used to purchase Treasury stock -$45,500
Less: Cash Dividends Paid -$21,000
Net Cash Used by Financing Activities (C) $283,500
Net Increase in Cash (A+B+C) $587,825
Add: Beginning cash balance 78,750
Ending cash balance $666,575
