I need help answering the following question:

Question 1.)

Make a statement of Cash Flows using the direct method. Use the attached comparative balance sheet, income statement, and the following notations:

Part 1:

A. Sold equipment for $25,000 cash.

B. Purchased equipment costing $100,000 with $25,000 cash and $75,000 trade in of old equipment.

C. Borrowed $4,000 cash by signing a note payable.

D. Paid $41,000 cash to reduce long-term notes payable.

E. Issued 1,000 shares of common stock at $10 per share.

F. Declared and paid $7,000 cash dividends.

Part 2:

ABC Corp.

Comparative Balance Sheet

December 31, 2003

Assets 2003 2002

Current Assets :

Cash $648,500 $69,000

Accounts Receivable $75,000 $82,500

Merchandise Inventory $235,000 $255,000

Prepaid Expenses $14,000 $16,000

Plant Assets :

Equipment $252,000 $200,000

Accumulated Depreciation $100,000 $91,000

Total Assets: $1,225,000 $531,500

Liabilities and Equity 2003 2002

Current Liabilities:

Accounts receivable $18,500 $95,500

Long-Term Liabilities:

Notes Payable $88,000 $75,000

Equity:

Common Stock, $10 Par $210,000 $200,000

Contributed Capital $25,000 $0

Retained Earnings $783,5000 $161,000

Total Liabilities and Equity: $1,125,000 $531,500

Part 3:

ABC Corp.

Income Statement

For the Year Ended December 31, 2003

Sales = $1,560,000

Cost of Goods Sold = $525,000

Gross Profit = $1,035,000

Operating Expenses:

Depreciation Expense = $42,000

Other Expenses = $350,000

Total Operating Expenses = $392,000

Other Gains (Losses)

Loss on Sale of Equipment = $2,500

Income Before Taxes = $640,500

Income Taxes = $23,500

Net Income = $617,000

Part 4:

ABC Corp.

Statement of Cash Flows (Direct Method)

For the Year Ended December 31, 2003

Cash Flows from Operating Activities:

Cash received from customers =

Cash paid for merchandise =

Cash paid for other expenses =

Cash paid for income taxes =

Net cash provided by operating activities =

Cash flows from investing activities:

Cash received from sale of equipment =

Cash paid for equipment =

Net cash used in investing activities =

Cash flows from financing activities:

Cash borrowed on short-term note =

Cash paid on long-term note =

Cash received from issuing stock =

Cash paid for dividends =

Net cash used for financing activities =

Net cash increase =

Cash beginning balance 2003 =

Cash ending balance 2003 =