Answer and Explanation:
The Preparation of balance sheet is prepared below:-
                                      Squirrel Tree Services
                                         Balance Sheet
                               For the year ended 31st December
Assets                        Amount              Liabilities                 Amount
Cash                             $8,300            Accounts payable    $11,500
Supplies                       $2,400            Salary payable         $4,100
Prepaid insurance       $4,100            Notes payable          $26,000
Building                        $78,000 
                                                             Total liabilities         $41,600
                                                             Common stock        $40,000
                                                             Retained earning    $11,200
                                                             Total stockholder
                                                                  equity                  $51,200
                                                             Total liabilities and
<u>Total assets              $92,800          stockholder equity   $92,800</u>
B. The preparation of cash flows is shown below:-
                                      Squirrel Tree Services
                                         Cash flow
                               For the year ended 31st December
Particulars                                                                         Amount
Cash flow from operating activities
Cash inflow from customers                   $96,000
Cash outflow for salaries                         ($40,000)
Cash outflow for supplies                        ($22,000)
Net cash flow from operating activities                         $34,000
Cash flow from investing activities
Sale of investment                                  $35,800
Purchase of building                               ($98,000)
Net cash flow from investing activities                         ($62,200)
Cash flow from financing activities
Borrow from bank                                  $38,000
Dividends                                                ($15,500)
Net cash flow financing activities                                  $22,500
Net increase in cash                                                       ($5,700)
Beginning cash of the year                                            $15,200
Ending cash of the year                                                 $9,500
Working note
we deduct the cash inflow from cash outflow and add cash to reach the beginning cash of the year.