The following transactions pertain to the operations of Colton Company for 2011:

1. Acquired \(\$ 20,000\) cash from the issue of common stock.

2. Provided \(\$ 80,000\) of services on account.

3. Paid \(\$ 20,000\) cash on accounts payable.

4. Performed services for \(\$ 5,000\) cash.

5. Collected \(\$ 65,000\) cash from accounts receivable.

6. Incurred \(\$ 42,000\) of operating expenses on account.

7. Paid \(\$ 4,800\) cash for one year's rent in advance.

8. Paid a \(\$ 5,000\) cash dividend to the stockholders.

9. Paid \(\$ 900\) cash for supplies to be used in the future.

10. Recognized \(\$ 2,500\) of accrued salaries expense.

Required

a. Classify the cash flows from each of these transactions as operating activities (OA), investing activities (IA), or financing activities (FA). Use NA for transactions that do not affect the statement of cash flows.

b. Prepare a statement of cash flows. (This is the first year of operations.)