The following Cash T-account shows the total debits and total credits to the Cash account of Thomas Corporation for the current year.

1. Prepare a complete statement of cash flows for the current year using the direct method.

2. Refer to the statement of cash flows prepared for part 1 to answer the following questions. 

(a) Which section—operating, investing, or financing—shows the largest cash (i) inflow and (ii) outflow?

(b) What is the largest individual item among the investing cash outflows? 

(c) Are the cash proceeds larger from issuing notes or issuing stock? 

(d) Does the company have a net cash inflow or outflow from borrowing activities?

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Cash Balance, Dec. 31, prior year Receipts from customers Receipts from dividends Receipts from land sale. Receipts from machinery sale . 333,000 5,000,000 Payments for inventory. 208,400 Payments for wages 220,000 Payments for rent. 710,000 Payments for interest. 1,540,000 Payments for taxes.. 3,600,000 Payments for machinery 2,590,000 550,000 320,000 218,000 450,000 Receipts from issuing stock. Receipts from borrowing. Payments for stock investments Payments for note payable. Payments for dividends. Payments for treasury stock 2,236,000 1,260,000 386,000 500,000 218,000 .. ...... Balance, Dec. 31, current year. *.........