a. Prepare a cash flow worksheet. Comparative Balance Sheets Cash and cash equivalents Prior Year Dr. Cr. Current Year Accounts receivable $39,000 $ 68,000 21,000 x $ 40,000 x $ 63,800 0 68,000 Merchandise inventory 156,000 110,000 x 96,000 x Investments, long-term 0 20,000 0~ Plant assets 337,000 60,000 Accumulated depreciation (88,000) 12,000 x 36,000 32,000 x Total assets $512,000 $ Accounts payable $42,000 4,000 Salaries payable 3,000 44,000 x Income taxes payable 4,000 17,000 x 0 $ 42,000 x 20,000 x 170,000 20,000 361,000 (68,000) 614,800 38,000 1,000 Bonds payable 200,000 14,000 x 14,000 x Premium on bonds payable 8,000 0 x Common stock, no par 240,000 0 600 x 71,000 7,000 200,000 7,400 311,000 Retained earnings 15,000 0 x 20,000 x 50,400 Total liabilities and stockholders' equity $512,000 $ 614,800 Cash Flows from Operating Activities Net income 55,400 0 Depreciation expense Proceeds from sale of plant assets x 0 x 10,000 x 12,000 x 0 x Gain on sale of fixed assets 6,000 x 0 x Increase in inventory 14,000 x 0 x Decrease in accounts payable 4,000 x Decrease in salaries payable 0 0x 2,000- Increase in income taxes payable 0 x 3,000 x Cash Flows from Investing Activities Purchase of long-term investments 0~ 20,000 Amortization of bond premium 0 x 600 x Cash Flows from Financing Activities Dividends paid 20,000 Issuance of stock Net cash and cash equivalents increase $ Total Check 0 0 x 61,000 x 24,800 x 0 x 0x S 9,800 x Additional information 1. Purchased a plant asset, $60,000; issued capital stock in full payment. 2. Purchased a long-term investment in equity securities accounted for cash, $20,000. 3. Declared and paid a cash dividend, $20,000. 4. Sold plant asset for $10,000 cash (cost, $36,000; accumulated depreciation, $32,000). 5. Issued common stock, 1,000 shares at $11 per share cash. Required