Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2.

Swasey Company

Comparative Balance Sheets

At December 31, 20X1 and 20X2

1		20X1	20X2
2	Current assets:
3	Cash	$244,000.00	$645,000.00
4	Accounts receivable	$748,000.00	$586,500.00
5	Inventories	295,000.00	317,000.00
6	Long-term assets:
7	Plant and equipment	2,197,000.00	2,143,000.00
8	Accumulated depreciation	(1,190,000.00)	(1,259,000.00)
9	Land	990,000.00	1,439,500.00
10	Total assets	$3,284,000.00	$3,872,000.00
11	Current liabilities:
12	Wages payable	$700,000.00	$512,000.00
13	Long-term liabilities:
14	Bonds payable	0.00	388,000.00
15	Mortgage payable	100,000.00	0.00
16	Total liabilities	$800,000.00	$900,000.00
17	Stockholders equity:
18	Common stock	372,500.00	372,500.00
19	Paid-in capital in excess of par	281,500.00	281,500.00
20	Retained earnings	1,830,000.00	2,318,000.00
21	Total stockholders equity	2,484,000.00	2,972,000.00
22	Total liabilities and stockholders equity	$3,284,000.00	$3,872,000.00

Swasey Company

Income Statement

For the Year Ended December 31, 20X2

1	Revenues	$2,999,000.00
2	Gain on sale of equipment	100,000.00
3	Cost of goods sold	(1,919,000.00)
4	Depreciation expense	(269,000.00)
5	Interest expense	(7,500.00)
6	Net income	$903,500.00

During the year, Swasey Company sold equipment with a book value of $280,500 for $380,500 (original purchase cost of $480,500). New equipment was purchased.

	Required:
1.	Prepare a statement of cash flows for Swasey for 20X2.
2.	Reflect on the relationship between the statement of cash flows and the change in cash.

Amount Descriptions

Refer to the list below for the exact wording of a label or an amount description within your Statement of Cash Flows.

Amount Descriptions
Add cost of goods sold
Add interest expense
Decrease in accounts receivable
Decrease in wages payable
Decrease in inventories
Depreciation expense
Gain on sale of equipment
Increase in accounts receivable
Increase in wages payable
Increase in inventories
Issuance of bonds payable
Loss on sale of equipment
Net cash from financing activities
Net cash from investing activities
Net cash from operating activities
Net decrease in cash
Net income
Net increase in cash
Net loss
Payment of dividends
Payment of mortgage
Purchase of equipment
Purchase of land
Receipt of dividends
Sale of equipment

Statement of Cash Flows

1. Prepare a statement of cash flows for Swasey for 20X2. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Swasey Company

Statement of Cash Flows

For the Year Ended December 31, 20X2

1	Cash flows from operating activities:
2
3	Add (deduct) adjusting items:
4
5
6
7
8
9
10	Cash flows from investing activities:
11
12
13
14
15	Cash flows from financing activities:
16
17
18
19
20

Concluding Question

2. Complete the statement below regarding the relationship between the statement of cash flows and the change in cash.

The sum of the cash flows must equal the change in .