Wallace Company’s statement of cash flows for the current year is summarized as follows: Cash provided by operating activities………….$275,000

Cash used in investing activities……………… (140,000)

Cash provided by financing activities………… 45,000

Increase in cash during the year………………. $180,000

Cash balance, beginning of the year…………… 75,000

Cash balance, end of the year…………………. $255,000

a. Briefly explain what is included in each of the first three categories listed (i. e., the cash from operating, investing, and financing activities categories).

b. On the basis of the limited information presented above, describe the company’s change in cash position during the year and your interpretation of the strength of the company’s current (end-of-year) cash position.