The 2007 accounting records of Verlander Transport reveal these transactions and events.

Payment of interest $ 10,000 Collection of accounts receivable $182,000 Cash sales 48,000 Payment of salaries and wages 53,000 Receipt of dividend revenue 18,000 Depreciation expense 16,000 Payment of income taxes 12,000 Proceeds from sale of vehicles 812,000 Net income 38,000 Purchase of equipment for cash 22,000 Payment of accounts payable Loss on sale of vehicles 3,000 for merchandise 115,000 Payment of dividends 14,000 Payment for land 74,000 Payment of operating expenses 28,000 Instructions Prepare the cash flows from operating activities section using the direct method. (Not all of the items will be used.)

Exercises 6 2 7 Compare two companies by using cash-based ratios.

Compute cash provided by operating activities—direct method.

(SO 6)

Compute cash payments—

direct method.

(SO 6)

Compute cash flow from operating activities—direct method.

(SO 6)

628 CHAPTER 12 Statement of Cash Flows Calculate cash flows—direct method.

(SO 6}

Distinguish among operating, investing, and financing activities.

(SO 6)

Determine cash flow effects of changes in equity accounts,

(SO 4)