. 1. Capital Hotels and Restaurants Incorporated rdcently hired a new accounting clerk. She has compiled the following information to prepare the statement of cash flows for the year ended December 31, 2020. Net income for the year was $114,140. Depreciation expense was $15,300. Equipment was sold fora gain of $16,000. Cash proceeds from the sale were $36,000. Equipment was purchased for $250,000. Dividends of $50,000 were paid. Accounts receivable increased by $31,400. Inventory decreased by $38,700. Accounts payable increased by $41,100. Notes payable increased by $55,000. Shares were sold for $50,000. Cash balance on January 1, 2020, was $114,800. Cash balance on December 31, 2020, was $117,640. The statement of cash flows the accounting clerk prepared is shown below. . . . + . Capital hotels and restaurants incorporated statement of Cash Flows For the Year ended december 31, 2020 Cash Flow from operating activities Net Income $114,140 Adjustments for Non-Cash Items Danrariation Finance 15 un Capital hotels and restaurants incorporated statement of Cash Flows For the Year ended december 31, 2020 Cash Flow from operating activities Net Income $114,140 Adjustments for Non-Clash Items Depreciation Expense 15,300 Changes in Current Assets and Current Liabilities Increase in Accounts Receivable 31,400 Decrease in Inventory (38,700) Increase in Accounts Payable 41,100 Sale of Equipment 36,000 Purchase of Equipment (250,000) netCash Provided (Used) by operating activities Cash Flow from investing activities Proceeds from Notes Payable 55,000 net Cash Provided (Used) by investing activities ($50,760) 55,000 Cash Flow from Financing activities Proceeds from Issue of Common Shares Payment of Cash Dividend net Cash Provided (Used) by Financing activities 50,000 (50,000) 0 net increase (decrease) in Cash Cash at the Beginning of the Year 4,240 114.800 (250,000 Sale of Equipment Purchase of Equipment net Cash Provided (Used) by operating activities ($50,760) Cash Flow from investing activities Proceeds from Notes Payable net Cash Provided (Used) by investing activities 55,000 55,000 Cash Flow from Financing activities Proceeds from Issue of Common Shares Payment of Cash Dividend net Cash Provided (Used) by Financing activities 0,000 (50,000) 0 net increase (decrease) in Cash Cash at the Beginning of the Year Cash at the end of the Year 4,240 114,800 $119,040 required a) Identify the problems with the statement of cash flows that the accounting clerk prepared. b) Prepare a corrected statement of cash flows. Capital hotels and restaurants incorporated statement of Cash Flows For the Year ended December 31, 2020 Cash Flow from operating activities net Cash Provided (Used) by operating activities: Cash Flow from investing activities net Cash Provided (Used) by investing activities: Cash Flow from Financing activities I net Cash Provided (Used) by Financing activities: net increase (decrease) in Cash: Cash at the Beginning of the Year: Cash at the end of the Year