From the following transactions, prepare a statement of cash flows for Lana and Sons in the proper form. The company began the year with a cash balance of $13,000. Describe and evaluate the company’s cash management activities during the year.
1. The shareholders contributed $7,000 in cash.
2. Performed services for $5,000; receiving $4,000 in cash and a $1,000 receivable.
3. Incurred expenses of $4,000; paid $3,000 in cash and $1,000 is still payable.
4. Purchased machinery for $10,000; paid $3,000 in cash and signed a long-term note payable for the remainder.
5. Paid the shareholders a $1,500 dividend.