Statement of Cash Flows

Zowine Company's condensed income statement for the year ended December 31, 20-2, is shown.

Net sales	$765,000
Cost of goods sold	550,000
Gross profit	$215,000
Operating expenses	30,000
Income before taxes	$185,000
Income tax expense	65,000
Net income	$120,000

Additional information obtained from Zowine's comparative balance sheets as of December 31, 20-2 and 20-1, is shown.

	20-2		20-1
Cash		$60,000		$20,000
Accounts receivable		70,000		100,000
Merchandise inventory		80,000		125,000
Accounts payable		55,000		90,000

Additional information obtained from Zowine's financial statements and auxiliary records for the year ended December 31, 20-2 is shown.

Acquired a new warehouse	$120,000
Bought new warehouse equipment	80,000
Issued a note to the bank	40,000
Issued additional common stock:
Par value	50,000
Paid-in capital in excess of par	20,000
Declared and paid cash dividends	30,000

Required:

Prepare a statement of cash flows for Zowine for the year ended December 31, 20-2.

Cash flows from operating activities: Net income $ 120,000 Adjustments for changes in current assets and liabilities related to operating activities: Decrease in accounts receivable Decrease in merchandise inventory Decrease in accounts payable Net cash provided by operating activities Cash flows from investing activities: Purchased warehouse Purchased warehouse equipment Total cash used by investing activities Cash flows from financing activities: Issued note payable Issued common stock Paid cash dividends Net cash provided by financing activities Net increase in cash Cash, January 1, 20-2 Cash, December 31, 20-2