Planet Accessories Company reported the following balance sheet and income statement at year-end 2004. In addition, dividends totaling $1,000 were paid.

Required

A. Assume the company uses the direct format to prepare its statement of cash flows. What amounts would be reported on the 2004 statement of cash flows for each of the following?

1. Cash collections from customers

2. Cash paid to suppliers of inventory

3. Cash paid for insurance

4. Cash paid for rent

5. Cash paid for depreciation

6. Cash paid for wages

B. What items and amounts would be reported under cash flow from investing activities?

C. What items and amounts would be reported under cash flow from financing activities?

D. Prepare a statement of cash flows using the directformat.

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Balance Sheets at December 31 2003 Income Statement for 2004 $ 826 553 Sales $135,800 revenue Accounts receivable 8,000 Cost of goods sold 11,600 10,100 Gross profit 300 Operating expenses: 0 Property, plant and equipment Less: Accumulated depreciation 8,750 3,735 Advertising (2,900) 1,90 Depreciation Total assets $33,476 $25,638 wages $ 3,750 4,000 Operating income 1.400 Interest expense Wages payable Loan payable, long-term Common stock, $1 par value Retained eanings Treasury stock 9.200 5.200 Income before taxes Total liabilities and shareholders' equity $33,476 $25,638