Sharon Feldman, president of Allied Products, considers $20,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements, only $15,000 in cash was available at the end of 2008. Since the company reported a large net income for the year, and also issued bonds and sold some long-term investments, the sharp decline in cash is puzzling to Ms. Feldman.

The following additional information is available for the year 2008:
a. The company sold long-term investments with an original cost of $30,000 for $50,000 during the year.
b. Equipment that had cost $90,000 and on which there was $40,000 in accumulated depreciation was sold during the year for $44,000.
c. Cash dividends totaling $28,000 were declared and paid during the year.
d. The stock of a dissident stockholder was repurchased for cash and retired during the year. No issues of stock were made.
Required:
1. Using the indirect method, compute the net cash provided by operating activities for 2008.
2. Using the data from (1) above and other data from the problem as needed, prepare a statement of cash flows for 2008.
3. Explain the major reasons for the decline in the company€™s cashbalance.