2. review below Spirit company's financial data and apply what you've learned for preparing statement of cash flow andcalculate the net cash flows provided (used) by financing activities. Don't hesitate to discuss your thoughts and results with others.

Spirit Company, a merchandiser, recently completed its 2013 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow:

SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Assets Cash $ 49,200 $ 73,500 Accounts receivable 65,830 51,000 Merchandise inventory 276,000 252,500 Prepaid expenses 1,000 1,600 Equipment 159,000 106,500 Accum. depreciation-Equipment (31,000) (40,000) Total assets $520,030 $445,100 Liabilities and Equity Accounts payable $ 58,555 $ 112,000 Short-term notes payable 9,000 7,000 Long-term notes payable 65,000 48,500 Common stock, $5 par value 162,750 150,750 Paid-in capital in excess of par, common stock 36,000 0 Retained earnings 188,725 126,850 Total liabilities and equity $520,030 $445,100SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 Sales $584,000 Cost of goods sold 283,000 Gross profit 301,000 Operating expenses Depreciation expense $ 20,000 Other expenses 132,400 152,400 Other gains (losses) Loss on sale of equipment 5,875 Income before taxes $142,725 Income taxes expense 24,250 Net income $118,475