Task 8: Given the fast growth of HHEC.com during the year, Sophia and Francesca are concerned about the sources and uses of the companys cash. You explain to them that preparing a Statement of Cash Flows will provide answers to some of their questions. In response, they give you HHEC.coms Year 3 income statement and balance sheet along with some additional information and ask you to prepare HHEC.coms Statement of Cash Flows for Year 3.
	Year 2	Year 3
Cash	25,000	29,500
Accounts Receivable	50,000	63,800
Inventory	45,000	38,000
Equipment	83,000	82,000
Accumulated depreciation	54,000	58,300
Accounts Payable	39,000	16,400
Sales Tax Payable	20,000	27,000
Notes Payable	3,000	5,400
Retained Earnings	79,000	92,200
Common Stock	6,000	11,000
Treasury Stock	3,000	2,000
Net Income	17,500	18,200
Dividends Payable	5,000	0
Note: In Year 3, equipment with a book value of $800 was sold for $900.
ANSWER