Knotting Company was formed and began business on January 1, 2022, when J. T. Wood transferred merchandise inventory with a value of $60,000, cash of $55,000, accounts receivable of $60,000, and accounts payable of $35,000. Common stock with a par value of $5 per share was issued to Mr. Wood. The company's common stock was recorded at par Knotting Company's statement of cash flows for 2022 is shown below: KNOTTING COMPANY Statement of Cash Flows Year Ended December 31, 2022 Cash Flow from Operations Net Income Adjustments Depreciation of building Depreciation of equipment Increase in accounts receivable Increase in inventory 50,000 5,000 6,000 (15,000) (8,000) Increase in prepaid insurance (800) Increase in accounts payable 17,000 Increase in income tax payable 2,500 6,700 Net cash flow provided by operations 56,700 Cash Flow from Investing Activities Purchase of land (30,000) Purchase of building Purchase of equipment (25,000) (60,000) Net cash used in investing activities. Cash Flow from Financing Activities Issuance of common stock at $5/share Net cash provided by financing activities (115,000) 5,000 Borrowing at bank by ienuance of note payable Net decrease in cash balance Cash balance, January 1, 2022 Cash balance, December 31, 2022 40,000 45,000 (13,300) 55,000 41,700