Adams Company engaged in the following transactions for the year 2016. The beginning cash balance was $28,400 and the ending cash balance was $61,810.

1. Sales on account were $282,800. The beginning receivables balance was $93,700 and the ending balance was $77,800.

2. Salaries expense for the period was $58,220. The beginning salaries payable balance was $3,990 and the ending balance was $2,280.

3. Other operating expenses for the period were $127,290. The beginning other operating expenses payable balance was $4,130 and the ending balance was $7,802.

4. Recorded $19,910 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $13,550 and $33,460, respectively.

5. The Equipment account had beginning and ending balances of $205,650 and $239,950, respectively. There were no sales of equipment during the period.

6. The beginning and ending balances in the Notes Payable account were $53,100 and $157,100, respectively. There were no payoffs of notes during the period.

7. There was $5,548 of interest expense reported on the income statement. The beginning and ending balances in the Interest Payable account were $1,230 and $820, respectively.

8. The beginning and ending Merchandise Inventory account balances were $94,240 and $113,088, respectively. The company sold merchandise with a cost of $151,323 (cost of goods sold for the period was $151,323). The beginning and ending balances in the Accounts Payable account were $9,150 and $11,072, respectively.

9. The beginning and ending balances in the Notes Receivable were $5,300 and $9,900, respectively. Notes receivable result from long-term loans made to employees. There were no collections from employees during the period.

10. "The beginning and ending balances in the Common Stock account were $104,000 and $126,000, respectively. The increase was caused by the issue of common stock for cash.

11. Land had beginning and ending balances of $48,400 and $35,535, respectively. Land that cost $12,865 was sold for $9,490, resulting in a loss of $3,375.

12. The tax expense for the period was $8,150. The Taxes Payable account had a $950 beginning balance and an $875 ending balance.

13. The Investments account had beginning and ending balances of $23,900 and $28,300, respectively. The company purchased investments for $18,900 cash during the period, and investments that cost $14,500 were sold for $23,000, resulting in a $8,500 gain.

Required

1. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Adams Company uses the direct method for showing net cash flow from operating activities.

2. Prepare a statement of cash flows using the direct method.