Prepare a statement of cash flows for Steeles Company using the Direct Method.

STEELES COMPANY COMPARATIVE STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2015 AND 2014
	2015	2014
Debt investments (held for collection)	$1,300	$1,470
Plant assets	$1,900	$1,700
Accumulated depreciation	($1,200)	($1,170)
Inventory	$1,600	$1,900
Accounts receivable	$1,750	$1,300
Cash	$1,800	$1,100
	$7,150	$6,300
Share capital- ordinary	$1,900	$1,700
Retained earnings	$2,450	$1,900
Bonds payable	$1,400	$1,650
Accounts Payable	$1,200	$ 800
Accrued liabilities	$ 200	$ 250
	$7,150	$6,300

STEELES COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015
Sales revenue	$6,900
Cost of goods sold	$4,,700
Gross margin	$2,200
Selling and administrative expense	$ 930
Income from operations	$1,270
Other income and expense Gain on sale of investments	$ 80
Income before tax	$1,350
Income tax expense	$ 540
Net income	$ 810

Additional information

During the year, $70 of ordinary shares were issued in exchange for plant assets. No plant assets were sold in 2015. Cash dividends were $260.

(b) What are the major sources of cash (inflows) in a statement of cash flows? What are the major uses (outflows) of cash?

(c) Some members of your group are having problems understanding how to prepare a cashflow statement using the direct method. Create a strategy or method to assist them in remembering the steps for preparing the statement.