P1-60A. (Learning Objective 4: Preparing a Statement of Cash Flows) The following data is derived from the financial statements of the Water Fountain Company for the year ended May 31, 20X7 (in thousands):

Requirements 1. Prepare a Statement of Cash Flows for the year ended May 31, 20X7. Not all items given appear on the Statement of Cash Flows.
2. What activities provided the largest source amount of cash? Is this a sign of financial strength or weakness?

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Purchases of property, plant and equipment. $ 3,500 Net income... Adjustments to reconcile net income to net cash provided Other investing cash payments....... $ 320 3,000 Accounts receivable...... 750 Payment of dividends 300 Share capital 5,000 by operating activities. 2,250 Revenues.. 58,700 Cash, beginning of year. 300 Issuance of shares......... Sales of property, plant and equipment 200 end of year 1,680 Retained earnings... 50 13,100 Cost of goods sold....... 40,800