Markham Ltd. was organized on September 1, 2012, with a cash investment of \($450,000\) by its shareholders. Markham arranged a long-term loan with a local bank for \($150,000\) and purchased a small office building for \($500,000\). During its fiscal year ended August 31, 2013, Markham collected

\($600,000\) in cash from customers, paid \($360,000\) in cash for operating expenses, and paid \($80,000\) in cash dividends to its shareholders.

Required

a. Classify each of the cash flows described above as operating, investing, or financing.

b. Organize the cash flows into a statement of cash flows.

c. Explain what your statement of cash flows tells you that an income statement doesn’t.