Problem 1 - *** using the direct method *** Comparative balance sheets for 2021 and 2020 and an income statement for 2021 are provided below for New England Travel. Additional information from the accounting records of New England Travel is provided.

Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands)

2021 2020

Assets: Cash $ 1,800 $ 1,125

Accounts receivable 1,800 1,350

Inventory 2,700 1,575

Prepaid Insurance 30 10

Land 2,025 1,800

Building 2,700 2,700

Less: Accumulated depreciation (900) (810)

Equipment 8,550 6,750

Less: Accumulated depreciation (1,575) (1,440)

Patent 3,600 4,500

$20,730 $17,560

Liabilities:

Accounts payable $ 2,280 $ 1,360

Accrued operating expenses payable 900 675

Note Payable land 450 0

Shareholders' Equity: Common stock 9,450 9,000

Paid-in capitalexcess of par 2,250 2,025

Retained earnings 5,400 4,500

$20,730 $17,560

Income Statement For year ended December 31, 2021 ($ in thousands)

Revenues: Sales revenue $7,935

Gain on sale of land 270 $8,205

Expenses:

Cost of goods sold $1,800

Depreciation expense-building 90

Depreciation expense-equipment 945

Loss on sale of equipment 45

Amortization of patent 900

Insurance expense 50

Operating expenses 1,450 5,280

Net income $2,925

Additional information from the accounting records:

a. During 2021, equipment with a cost of $900,000 (related accumulated depreciation is $810,000) was sold.

b. The Retained Earnings account reveal a reductions of $675,000 for stock dividends.

c. During 2021, land of $450,000 was purchased and a note payable of $450,000 was issued.

Required:

1. Determine cash inflows/ (outflows) from operating activities using the direct method

a. Cash received from customers $____________

b. Cash paid to suppliers $_____________

c. Cash paid for insurance $_____________

d. Cash paid for operating expenses $_____________

e. Net cash flows from operating activities $______________

Determine cash inflows or cash outflows (negative) from investing activities Description Amount

Description	Amount
Net cash flows from investing activities

2. Determine cash inflows or cash outflows (negative) from financing activities

Description	Amount
Net cash flows from financing activities