RST Ltd. provides the following information for the year:

• Net income: $25,000
• Depreciation expense: $3,000
• Increase in accounts receivable: $2,000
• Decrease in accounts payable: $1,500
• Purchase of equipment: $5,000
• Issuance of common stock: $7,000
• Payment of dividends: $2,500

Tasks:

1. Prepare the operating activities section of the cash flow statement using the indirect method.
2. Prepare the investing activities section of the cash flow statement.
3. Prepare the financing activities section of the cash flow statement.
4. Calculate the net increase or decrease in cash for the year.

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