Statement of Cash Flows Colorado Corporation was organized on January 1, 2010, with the investment of

$250,000 in cash by its stockholders. The company immediately purchased an offi ce building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a fi ve-year, $60,000 promissory note at a local bank during 2010 and received cash in the same amount. During its fi rst year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends.

Required 1. Prepare a statement of cash fl ows for the year ended December 31, 2010.

2. What does this statement tell you that an income statement does not?

AppendixLO1