Decrease in Cash Balance. Jon Walgren, the president of Dunbar Instruments, Inc., cannot understand why the firm's cash balance decreased by \(\$ 37,000\) during the last fiscal quarter, when the cash flow from operations for the quarter was \(\$ 71,000\). He had expected the cash balance would increase by that amount. Depreciation expense of \(\$ 25,000\) was deducted on the income statement and was the only difference between net income and cash from operations.

Noncurrent balance sheet items from the statements at the beginning and at the end of the quarter follow:

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Write a memo that will show Mr. Walgren why Dunbar's cash decreased.

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Plant and equipment (net) Long-term debt. Retained earnings Beginning of Quarter End of Quarter $386,000 $404,000 200,000 160,000 317,000 338,000