The following summarized Cash T-account reflects the total debits and total credits to the Cash ac¬

count of Texas Corporation for calendar year 2005. (1) Use this information to prepare a complete statement of cash flows for year 2005. The cash provided (used) by operating activities should be re¬

ported using the direct method. (2) Refer to the statement of cash flows prepared for part 1 to answer the following questions a through d:

(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 invest¬

ing 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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Accounting System Ele Eu Masson Tag Quests whoow Leb Balance, Dec. 31, 2004 Receipts from customers Receipts from dividends Receipts from land sale Receipts from machinery sale Receipts from issuing stock Receipts from borrowing 220,000 Payments for rent 710,000 Payments for interest 1,540,000 Payments for taxes BOB Cash -108 135,200 6,000,000 Payments for merchandise 1,590,000 208,400 Payments for wages 550,000 320,000 218,000 450,000 2,600,000 Payments for machinery. 2,236,000 Payments for long-term investments 2,260,000 Payments for note payable 386,000 Payments for dividends. 500,000 Payments for treasury stock 218,000 Balance, Dec. 31, 2005 ? Purchase