1. The following transactions occurred during February 2013 for the Quest Company. The company owns and operates a wholesale warehouse.

1. Issued 35,000 shares of capital stock in exchange for $350,000 in cash.
2. Purchased equipment at a cost of $50,000. $10,000 cash was paid and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $85,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $132,000. The cost of the goods sold was $77,000.
5. Paid $5,500 in rent on the warehouse building for the month of March.
6. Paid $7,000 to an insurance company for fire and liability insurance for a one-year period beginning March 1, 2013.
7. Paid $72,000 on account for the merchandise purchased in 3.
8. Collected $43,000 from customers on account.
9. Recorded depreciation expense of $1,200 for the month on the equipment.

Required:

Prepare a statement of cash flows, using the direct method to present cash flows from operating activities. Assume the cash balance at the beginning of the month was $40,000.