Brock Company is a merchandiser that prepared the statement of cash flows and income statement provided below:

Required:
Assume that you have been asked to teach a workshop to the employees within Brock Company€™s Marketing Department. The purpose of your workshop is to explain how the statement of cash flows differs from the income statement. Your audience is expecting you to explain the logic underlying each number included in the statement of cash flows. Prepare a memo that explains the format of the statement of cash flows and the rationale for each number included in Brock€™s statement of cashflows.

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Brock Company Statement of Cash Flows-Indirect Methoc Operating Activities Net income Adjustments to convert net income to a cash basis $ 275 Depreciation 140 (24) 39 (45) Decrease in accrued liabilities Increase in income taxes payable.. 6 (4 107 382 Net cash provided by operating activities.... Investing Activities Additions to property, plant, and equipment Proceeds from sale of equipment Net cash used in investing activities.. (150) 19 (131) Financing Activities 40 Issuance of common stock.. Cash dividends paid... . Net cash provided by financing activities..... Net increase in cash and cash equivalents...... Beginning cash and cash equivalents Ending cash and cash equivalents... (35) 9 260 170 $ 430 Brock Company Income Statement $5.200 2,980 2,220 1,801 419 Net sales Cost of goods sold . Net operating income.... Nonoperating items: Gain on sale of equipment.... Income before taxes 423 148 $ 275 Net income .-