Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020:

Required:Prepare a statement of cash flows that explains the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (e.g., the change in the amount of production equipment is not the result of both a purchase and sale of equipment). What is the purpose of the statement of cash flows? How is this purpose accomplished? Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item; these are the amounts that will be in your solution.

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MILLCO INC. Balance Sheets February 28 and January 31, 2020 February 28 January 31 Assets $111,000 159,000 282,000 Cash $126,000 192,000 Accounts receivable Merchandise inventory 243,000 $561,000 $552,000 Total current assets Plant and equipment: Production equipment 456,000 498,000 Less: Accumulated depreciation (72,000) (63,000) $945,000 Total assets $987,000 Liabilities $111,000 132,000 Accounts payable $123,000 Short-term debt 132,000 72,000 Other accrued liabilities 63,000 Total current liabilities Long-term debt $306,000 $327,000 138,000 99,000 Total liabilities $405,000 $465,000 Stockholders' Equity Common stock, no par value, 80,000 shares authorized, 60,000 and 56,000 shares issued, respectively Retained earnings: Beginning balance Net income for month $312,000 $288,000 $129,000 $192,000 108,000 (30,000) 87,000 Dividends (24,000) Ending balance Total stockholders' equity $270,000 $192,000 $582,000 $480,000 Total liabilities and stockholders' equity $987,000 $945,000