The cash flows shown below were extracted from the accounts of Jason Taylor, a music shop owner.

Repayment of loan

$390 000

Sale of property

390 000

Interest received

1 560

Payment to employees

78 000

Receipts from customers

273 000

Expenses paid

23 400

Computer equipment purchase

23 400

GST paid

780

Payments to suppliers

156 000

Income taxes paid

3 120

Beginning cash balance

7 800

A. Prepare statement of cash flows using the direct method.

B. Outline some cash flow warning signals.