Exercise 3: In order to prepare the statement of cash flows for Sphinx Corporation for 2019, the accountant has compiled the following data regarding cash flows: Purchases of marketable securities Proceeds from sales of marketable securities Interest and dividends received Interest paid Taxes paid Dividends paid Proceeds from short-term borrowing Payments to settle short-term debts (principal repaid) Cash received from customers Cash paid to suppliers and employees Proceeds from issuing capital stock Purchases of plant assets Proceeds from sales of plant assets Cash and cash equivalents, beginning of year 48,000 75,000 19,500 18,000 43,500 27,000 31,500 36,000 681,000 531,000 118,500 201,000 58,500 73,500 Instructions: a. Based on the above information, prepare a complete statement of cash flows for Sphinx Corporation, showing the computation of net cash flows from operating activities by the direct method. (15 points) b. State the purposes of a statement of cash flows. (5 points) c. Explain the relationship between the statement of cash flows and the income statement. (5 points) d. Discuss some strategies for improvements in cash flow. (10 points)