Refer to the information for Frank Corporation in P5€“2.

Required:
1. Prepare a statement of cash flows for the year ended December 31, 2014. Use the direct method to compute the cash flows from operating activities. Include any additional required note disclosures.
2. Is the direct method of reporting cash flows from operating activities easier to prepare than the indirect method? Explain.
3. Is the direct method of reporting cash flows from operating activities easier to understand than the indirect method? Explain.

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December 31 2014 $76,000 17000 2013 $21,000 12,000 Cash Trade receivables Inventory Trade payables Accrued wages payable Income taxes payable 60,000 5200010,000 7000 800 1,000 3,000 5,000