Pete Kent and Maria Robles are examining the following statement of cash flows for Sullivan Company for the year ended January 31, 2017.

With whom do you agree, Pete or Maria? Explain your position.

Pete Kent and Maria Robles are examining the following statement of cash flows for Sullivan Company for the year ended January 31, 2017 SULLIVAN COMPANY Statement of Cash Flows For the Year Ended January 31, 2017 Sources of cash From sales of merchandise From sale of capital stock From sale of investment (purchased below) From depreciation From issuance of note for truck From interest on investments $385,000 405,000 80,000 55,000 20,000 6,000 951,000 Total sources of cash Uses of cash For purchase of fixtures and equipment For merchandise purchased for resale 320,000 258,000 For operating expenses (including depreciation 170,000 75,000 20,000 10,000 3,000 856,000 $95,000 For purchase of investment For purchase of truck by issuance of note For purchase of treasury stock For interest on note payable Total uses of cash Net increase in cash Pete claims that Sullivan's statement of cash flows is an excellent portrayal of a superb first year with cash increasing $95,000. Maria replies that it was not a superb first year. Rather, she says, the year was an operating failure, that the statement is presented incorrectly, and that $95,000 is not the actual increase in cash. The cash balance at the beginning of the year was $140,000