Tech Arts Ltd. began 2014 with cash of $112,000. During the year, the company earned service revenue of $2,400,000 and collected $2,360,000 from clients. Expenses for the year totalled $1,760,000, of which the company paid $1,640,000 in cash to employees and $60,000 in cash for supplies. Tech Arts Ltd. also paid $480,000 to purchase computer equipment and paid a cash dividend of $80,000 to its shareholders during 2014.
Required
1. Compute net income for the year.
2. Determine the cash balance at the end of the year.
3. Prepare the company's cash flow statement for the year. Format operating activities by the direct method.