The comparative balance sheet of Fidelity Medical Supply at December 31, 2008, reported the following:

Fidelity's transactions during 2008 included the following:

Requirements 

1. Prepare the statement of cash flows of Fidelity Medical Supply for the year ended December 31, 2008. Use the indirect method to report cash flows from operating activities, (pp. 791-792) 2. Evaluate Fidelity's cash flows for the year. Mention all three categories of cash flows and give the reason for vour evaluation.

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December 31, 2008 2007 Current Assets: Cash and cash equivalents .......... $32,500 $22,500 Accounts receivable.................. 26,600 29,300 Inventories. 54,600 53,000 Current Liabilities: Accounts payable......... $29,100 $28,000 Accrued liabilities...... 14,300 16,800