Response to the following problem:
Prepare a statement of cash flows-direct method
McCracken Horse Farms, Inc., began 2014 with cash of $58,000. During the year, McCracken earned service revenue of $694,000 and collected $640,000 from customers. Expenses for the year totaled $480,000, with $465,000 paid in cash to suppliers and employees. McCracken also paid $119,000 to purchase equipment and a cash dividend of $37,000 to stockholders. During 2014, McCracken borrowed $25,000 by issuing a note payable. Prepare the company's statement of cash flows for the year. Format operating activities by the direct method.