A comparative balance sheet for Stokely, Inc., on December 31, 2022 and 2021, follows. Additional information about the firm’s financial activities during 2022 is also given below.

INSTRUCTIONS
Prepare a statement of cash flows for 2022. Additional information for the year follows:
a. Had net income of $100,000.
b. Recorded $20,000 in depreciation.
c. Issued bonds payable with a par value of $50,000 at par and received cash.
d. Received $30,000 in cash for the issue of an additional 30,000 shares of $1 par value common stock.
e. Purchased equipment for $50,000 in cash.

Analyze: Explain why a decrease in accounts payable is considered an adjustment to cash flows from operating activities.

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Cash Accounts Receivable (Net) Merchandise Inventory Property, Plant, and Equipment Less Accumulated Depreciation Total Assets Liabilities Accounts Payable Bonds Payable Total Liabilities Assets Stokely, Inc. Comparative Balance Sheet December 31, 2022 and 2021 Liabilities and Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity Stockholders' Equity Common Stock ($1 par, 100,000 shares authorized, 60,000 shares issued in 2021 and 30,000 shares issued in 2022) Retained Earnings 2022 149900 130600 47600 250000 (40000) 538100 57000 160000 217000 90000 231000 321100 538100 ▬▬ + 2021 73500 80600 44000 IH#### 200000 (20000) 378100 77000 110000 187000 60000 131100 191100 378100 T + I T