Greco Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following trial balance information.

Additional data related to 2015 are as follows.
1. Equipment that had cost $11,000 and was 30% depreciated at time of disposal was sold for $2,500.
2. $5,000 of the long-term note payable was paid by issuing ordinary shares.
3. Cash dividends paid were $5,000.
4. On January 1, 2015, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,000 (net of $4,000 taxes).
5. Equity investments (non-trading) were sold at $1,500 above their cost. The company has made similar sales and investments in the past.

6. Cash and a long-term note for $16,000 were given for the acquisition of equipment.
7. Interest of $2,000 and income taxes of $5,000 were paid in cash.
Instructions

(a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Greco.

(b) What would you expect to observe in the operating, investing, and financing sections of a statement of cash flows of:
(1) A severely financially troubled firm?
(2) A recently formed firm that is experiencing rapid growth?

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Cash Accounts receivable Inventory Equity investments (non-trading) Buildings Equipment Copyright Totals Allowance for doubtful accounts Accumulated depreciation-equipment Accumulated depreciation-buildings Accounts payable Dividends payable Notes payable, short-term (non-trade) Long-term notes payable Share capital-ordinary Retained earnings December 31 2015 2014 $ 38,500 $13,000 12,250 10,000 12,000 10,000 -0- 3,000 -0- 29,750 40,000 20,000 5,000 5,250 $107,750 $91,000 $ 3,000 $ 4,500 2,000 4,500 -0- 6,000 5,000 4,000 -0- 5,000 3,000 4,000 36,000 25,000 38,000 33,000 20,750 5,000 $107,750 $91,000