Additional data for the current year are as follows: (a) Net income, $75,800. (b) Depreciation reported on income statement, $38,000. (c) Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000. (d) Bonds payable for $75,000 were retired by payment at their face amount. (e) 2,500 shares of common stock were issued at $30 for cash. (f) Cash dividends declared and paid, $40,000. (g) Investments of $100,000 were sold for $125,000.

Note: Full question is attached as picture below

                                    Barry Company

                            Statement of Cash Flows

                 For the Tear Ended December 31, Year 2

Cash flows from operating activities:

Net income                                             $75,800

Adjustments to reconcile net income to

net cash flow from operating activities:

Depreciation expense                           $38,000

Gain on sale of investments                -$25,000

Changes in current operating

assets & liabilities:

Decrease in Accounts receivable        $9,200  

Increase in inventories                        -$16,000

Increase in Accounts payable              $12,500

Net cash flow from operating activities                     $94,500

Cash flows from investing activities:

Sale of investments                               $125,000

Purchase of equipment                        -$150,000

Net cash flow used for investing activities               -$25,000

Cash flows from financing activities:

Retirement of bonds payable               -$75,000  

Issuance of common stock                    $75,000

Payment of dividends                           -$40,000

Net cash flow used for financing activities               -$40,000

Net increase in cash                                                      $29,500

Cash at the beginning of the year                                 $42,500

Cash at the end of the year                                           $72,000

answer(d) encourage cooperation by improving the chances of mutually agreeable transactions;