Problem:
Presented below are selected financial statement items for Preacher Corporation for December 31, 2014.
Inventory $55,000 Cash paid to purchase equipment $20,000
Cash paid to suppliers 154,000 Equipment 40,000
Buildings 400,000 Service revenue 200,000
Common Stock 20,000 Cash received from customers 162,000
Cash dividends paid 2,000 Cash received from issuing bonds payable 40,000
Cash at beginning of period 11,000
Required:
Question 1: Determine which items should be included in a statement of cash flows, and then prepare the statement for Preacher Corporation.
Question 2: Comment on the adequacy of net cash provided by operating activities to fund the company's investing activities and dividend payments.
Note: Show all workings.