(a) Note that 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.

(b) Using the information provided by the Statement of Cash Flows, specify two questions that you would ask management if you were a financial analyst attempting to issue a buy/sell recommendation to clients. Explain why you would ask each question.

Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operating activities Deferred income taxes Depreciation and amortization Changes in assets and liabilities Accounts receivable, trade Inventories Prepaid and other current assets Deposits and other current 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 Other Information: Current liabilities Total liabilities Net sales $ $ $ $ ssssssssssss $ $ $ $ $ $ $ SS $ ssssss. $ $ $ is. $ $ ssssss $ $ Current Year 17,523 $ (69,524) $ 316,416 $ $ (38,267) (1,599,014) (444,794) (24,240) 2,017,059 $ 61,321 $ sssss $ $ $ ssss $ $ $ 236,480 $ (2,012,892) (315,353) $ (2,181,765) $ sssssss $ Prior Year 838,955 (146,590) 181,348 (25,947) (1,289,293) (113,205) (83,044) (284,567) 170,755 (58,219) (8,960) 117,810 (700,957) (4,422,953) 9,685,435 4,561,525 4,055,465 $ 1,995,600 4,620,085 $ 2,184,386 20,560,586 $ 17,025,856