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

1. Repayment of loan $390 000
2. Sale of property390 000
3. Interest received1 560
4. Payment to employees78 000
5. Receipts from customers273 000
6. Expenses paid23 400
7. Computer equipment purchase23 400
8. GST paid780
9. Payments to suppliers156 000
10. Income taxes paid3 120
11. Beginning cash balance 7 800

A. Prepare a statement of cash flows using the direct method. (5 marks)

B. Outline some cash flow warning signals. (5 marks)