Ricoh Co$.$ had the following activity during a recent period:

Net income $ $175,000$

Depreciation $27,500$

Issuance of bonds payable $1,000,000$

Decrease in accounts payable $28,000$

Decrease in inventory $75,000$

Proceeds on sale of capital assets $575,000$

Gain on sale of capital assets $37,500$

Increase in long$-$term notes payable $55,000$

Decrease in wages payable $71,000$

Increase in accounts receivable $22,500$

Instructions

a$)$ Prepare the cash flows from operating activities section of the Statement of

Cash Flows.

b$)$ Comment on the changes in accounts receivable, accounts payable and

inventory for Ricoh. Would you normally expect the changes in these three

accounts to be related?