The comparative balance sheet for Sors Limited at December 31 is as follows: 2020 2019 Assets Current Cash $ 6,000 $7,000 Accounts receivable 3,000 4,500 Merchandise inventory 12,000 11,000 21,000 22,500 Plant assets Land 23,000 10,000 Equipment 40,000 30,000 Acc. dep'n-equipment (9,000) (8,000) 54,000 32,000 $75,000 $54,500 Liabilities Current Accounts payable $ 6,000 $7,000 Non-current borrowings, due in one year 6,000 6,000 12,000 13,000 Non-current Borrowings 10,000 16,000 22,000 29,000 Stockholders' Equity Common stock 8,000 3,000 Retained earnings 45,000 22,500 53,000 25,500 $75,000 $54,500 Additional information for 2020: a. Net income for the year was $27,500. There were no income taxes. b. No land was sold. c. Equipment was purchased for $20,000 in exchange for common stock valued at $5,000, plus $15,000 cash. d. Equipment costing $10,000 was sold for $12,000 cash; a $4,000 gain was reported in net income. e. Cash dividends of $5,000 were declared and paid. f. Depreciation expense of $3,000 was included in the net income amount. 8. No borrowings were repaid. Required: 1. Prepare a statement of cash flows. 2. What observations about Sors Limited can you make from the SCF? Statement of Cash Flows Cash flows from operating activities Net income Adjustments Net cash provided by operating activities Cash flows from investing activities Net cash provided by investing activities Cash flows from financing activities Net cash used by financing activities Net increase(decrease) in cash Cash at beginning of period Cash at end of period