Following is a partially completed statement of cash flows for Purr N Fur Company.

Required:
(a) What method does Purr N Fur Company use to prepare its statement of cash flows? How does the method used differ from the alternative?
(b) Complete Purr N Fur€™s statement of cash flows.
(c) What was Purr N Fur€™s largest source of cash during the year in question?
(d) Based on the SCF, how would you assess Purr N Fur€™s performance during the year?

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Cash flow from operating activities Net income Adjustments to reconcile net income S 2,866 to net cash provided by operating activities: Depreciation expense Gain on sale ofland (230) Changes in current assets and liabilities: Increase in accounts receivable (1,726) 700 1,334 Decrease in inventories Decrease in prepaid expenses Decrease in short-term notes (800) 2,008) payable Decrease in accrued liabilities Net cash provided by operating Cash flows from investing activities Purchase of property, plant, & activities Sale of land equipment 15,278) Net cash used by investing activities (2,226) Cash flows from financing activities Sale of common stock Dividend payments Net cash provided by financing $12,658 8,144 S 8,230 activities Net increase in cash Cash balance, 12/31/07 Cash balance, 12/31/08 S 22,664