The owner of a small business has asked you to prepare a statement that will show him where his firm’s cash came from and how it was used this year. He gives you the following information based on the Cash account in his general ledger.            

In addition, the following is available from company records:

Sales were $61,410 for the year.

The Accounts Receivable balance decreased by $690.

Cash operating expenses totaled $54,165 (including cost of sales, supplies, rent, utilities, part-time help, and other miscellaneous expenses.

Accounts Payable decreased by a net of $2,760 during the year.

The Inventory balance remained constant throughout the year.

Depreciation of $1,725 was taken this year.

Required:

Prepare a cash flow statement using the direct method.

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S3.450 $34,500 S345 S3.105 27,600 69.000 Balance at beginning of year Collection of accounts receivable Interest on savings account Sale of old machine Cash sales Total Payment on vendor accounts Cash purchase of supplies Cash purchase of inventory Down payment on new truck Rent payments Utilities Interest payment Other miscellaneous expenses Payment on debt Part-time help S17.250 S345 17,250 S3.450 S8.625 S2.070 1.035 S1.725 S3.450 S6,900 S55,200 S62,100 6.900 Balance at end of vear