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Given the following information for Test Company, prepare a worksheet for the Statement of Cash Flows using Indirect method and prepare journal entries for the investing, financing and non-cash items for the year ended December 31, 2020.

Assets	2020	2019
Cash and cash equivalents	$ 42,400	$ 180,000
Investment securities Available for Sale	50,000	0
Allowance to adjust securities to market	(3000)	0
Accounts receivable	400,000	345,000
Allowance for uncollectible accounts	(20,000)	(31,000)
Inventories	680,000	643,000
Property, plant, and equipment	810,500	743,400
Accumulated depreciation	(229,000)	(228,000)
Total Assets	$1,730,900	$1,652,400
Liabilities and Stockholders Equity
Accounts payable	$ 46,000	$ 103,000
Short-term notes payable	100,000	120,000
Accrued liabilities	76,500	48,000
Bonds payable	250,000	278,000
Discount on bonds payable	(19,600)	(20,800)
Deferred income tax liability	108,000	97,000
Total Liabilities	$ 560,900	$ 625,200
Common stock, $10 par	$ 840,000	$ 790,000
Paid-in capital in excess of par	52,000	20,000
Retained earnings	301,000	217,200
Accumulated other comprehensive income	(3000)	0
Treasury Stock	(20,000)	0
Total Stockholders Equity	$1,170,000	$1,027,200
Total Liabilities and Stockholders Equity	$1,730,900	$1,652,400

Additional information includes:

1. Net income for the year ended December 31, 2020, was $175,300.
2. During 2020, machinery and land were purchased at a total cost of $115,100.
3. Machinery with a cost of $48,000 and a book value of $4,200 was sold for $3,600.
4. The bonds payable mature at the rate of $28,000 every year.
5. In January 2020, the company issued an additional 1,000 shares of its common stock at $14 per share.
6. In May 2020, the company declared and issued a 5% stock dividend on its outstanding stock; there were 80,000 shares of stock outstanding at the time, and the market value per share after the stock dividend was issued was $17.
7. During the year, cash dividends of $20,000 were paid on the common stock.
8. In November 2020, 1,000 shares of treasury stock were purchased for $20 per share. ABC uses the cost method.
9. During 2020, a prior-period adjustment was made to correct an understatement of depreciation on equipment. The amount of the adjustment was $3,500. Ignore any tax effect/impact.
10. During the year, investment securities were purchased for $50,000. As of December 31, 2020, the securities have a market value of $47,000. The securities are classified as available for sale securities.
11. Depreciation expense for the year totaled $41,300.

Answer the following:

Why is the increase in A/R considered a use of cash?

Why is the Loss on the Sale of the Machine accounted for under Operating Activities?