(a) Net income in the current year was only $17,523 compared to prior-year income of $838,955, but cash flow from operations was $236,480 in the current year and a negative $700,957 in the prior year. Explain the causes of this apparent paradox. (9 points) (b) Assume you are a financial statement user/investor. Using the information provided by the Statement of Cash Flows, specify one question that you would ask management if you were determining whether to purchase stock in Vermont Teddy Bear Company. Justify why you would ask that question. (4 points) Cash flow from operating activities: Net income Adjustments to reconcile net income to net Cash provided by operating activities Deferred income taxes Depreciation and amortization (69,524)316,416(146,590)181,348 Changes in current assets and current liabilities: Accounts receivable, trade Inventories Prepaid and other current assets Deposits and other assets Accounts payable Accrued expenses Accrued interest payable, debentures Other Income taxes payable Net Cash provided by (used for) operating activities Net cash used for investing activities Net cash (used for) provided by financing activities Net change in cash and cash equivalents (38,267)(25,947)(1,289,293 \begin{tabular}{cc} (1,599,014) & (1,289,293 \\ (444,794) & (113,205) \\ (24,240) & (83,044) \\ 2,017,059 & (284,567) \\ 61,321 & 170,755 \\ & (58,219) \\ & (8,960) \\ & 117,810 \\ \hline \end{tabular} 236,480(2,102,892)(315,353)(2,181,765)(700,957)(4,422,953)9,685,4354,561,525 Other Information: Current Liabilities Total Liabilities Net Sales 4,055,4654,620,08520,560,5661,995,6002,184,38617,025,856