You have been asked to settle an argument between a client and his inexperienced bookkeeper. Presented below is a Statement of Cash Flows prepared by the bookkeeper. Banana Republic Statement of Cash Flows January $31,2025$ Sources of cash From sales of merchandise $$382,000$ From sale of common stock $375,000$ From sale of investment $125,000$ From depreciation $78,000$ From issuance of note for truck $30,000$ From interest on investments $10,000$ Total Sources of cash $1,000,000$ Uses of cash For purchase of fixtures and equipment $330,000$ For merchandise purchased for resale $255,000$ For operating expenses$($including depreciation$)170,000$ For purchase of investment $95,000$ For purchase of truck by issuance of note $30,000$ For purchase of treasury stock $10,000$ For interest on note $1,000$ Total uses of cash $891,000$ Net increase in cash $$109,000$ The bookkeeper claims this statement is an excellent portrayal of a great first year with an increase in cash of $$109,000.$ Your client claims that the first year of operations was an operating failure and the $$109,000$ is not the increase in cash. Using the statement above, prepare a statement of cash flows in proper form using the indirect method. The only noncash items in income are depreciation and the gain from the sale of the investment $($the purchase and the sale are related$).$ With whom do you agree, your client or the bookkeeper? Explain your position