10.

(TCO B) The cash flow data of Signet Sales for the year ended December 31, 2004 are as follows:

Cash payment of dividends	$ 70,000
Purchase of land	$ 28,000
Cash payments for interest	$ 20,000
Cash payments for salaries	$ 90,000
Sale of equipment	$ 76,000
Retirement of common stock	$ 50,000
Purchase of equipment	$ 60,000
Cash payment to suppliers	$170,000
Cash collection from customers	$500,000
Cash at beginning of year	$ 50,000

o Prepare a statement of cash flows for Signet Sales using the direct method in accordance with SFAS 95. o Discuss, from an analyst's viewpoint, the purpose of classifying cash flows into the categories required by SFAS 95.

(Points : 25)