CA5-5 WRITING (Cash Flow Analysis) The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the cash flow statement for the year ended December 31, 2017. Because he must leave on an emergency, he asks you to finish the letter by explaining: (1) the disparity between net income and cash flow, (2) the importance of operating cash flow, (3) the renewable source(s) of cash flow, and (4) possible suggestions to improve the cash position. KAPPELER CORPORATIONStatement of Cash FlowsFor the Year Ended December 31, 2017 Cash flows from operating activities Net income $ 100,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $10,000 Amortization expense 1,000 Loss on sale of fixed assets 5,000 Increase in accounts receivable (net) (40,000) Increase in inventory (35,000) Decrease in accounts payable (41,000) (100,000) Net cash provided by operating activities 0 Cash flows from investing activities Sale of plant assets 25,000 Purchase of equipment (100,000) Purchase of land (200,000) Net cash used by investing activities (275,000) Cash flows from financing activities Payment of dividends (10,000) Redemption of bonds (100,000) Net cash used by financing activities (110,000) Net decrease in cash (385,000) Cash balance, January 1, 2017 400,000 Cash balance, December 31, 2017 $15,000