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Sharon Feldman, president of Allied Products, considers $20,000 to be minimum cash balance for operationg purposes.

Sharon Feldman, president of Allied Products, considers $20,000 to be minimum cash balance for operationg purposes. As can bee 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 inverstments, the sharp decline in cash i puzzling to Ms. Feldman.
The following additional information is available for the year 2008.
a) The comany sold long-term investmetns 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 druing the year for $44,000.
c) Cash dividents totalling $28,000 were declared and paid during the year.
d) The stock of dissident stockholder was repruchased for cash and retired during the year. No issues of stock were made.
1) Using the indirect method, compute the net cash provided by operating activities for 2008.
2) Using the data from (1) above and other date from the problem as needed, prepare a statment of cash flows for 2008.
3) Explain the major reasons for the decline in the company's cash balance.

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