Cash flow statement The following transactions pertain to LMN Ltd for December 2021.

a The company issued shares with shareholders investing $250 000 in cash.

b Purchased $43 000 worth of inventory on credit.

c Rent of $8000 was paid.

d Made credit sales of $110 000.

e Received $2000 bill from an advertising campaign to promote a new product. This amount will be paid in January.

f Inventory was purchased for $27 000 cash.

g Paid $30 000 of accounts payable.

h Wages of $24 000 were paid.

i Received $45 000 from accounts receivable.

j Purchased new machinery at a cost of $9000 and paid cash.

k Owed employees $3500 in wages at the end of December.

l Depreciation on the new equipment equalled $1000.

m Interest of $6000 is owed by the bank at the end of December. It will be received in January 2022.

n Received $8000 from a client. Services to the client will be provided in January.

o Paid a dividend of $20 000.

Required:

1 List the name and dollar amounts of all cash flows under the headings of

(a) operating,

(b) investing and (c)

financing for the month of December 2021.

2 Comment on the cash flow from operations for the month and the potential problems it creates.