The following statement was prepared by Maloney Corporation’s accountant.

The following additional information relating to Maloney Corporation is available for the year ended September 30, 2015.
1. Salaries and wages expense attributable to share-option plans was $25,000 for the year.

2. 

3. A share dividend of 10,000 Maloney Corporation ordinary shares was distributed to ordinary shareholders on April 1, 2015, when the per share market price was $7 and par value was $1.
4. On July 1, 2015, when its market price was $6 per share, 16,000 of Maloney Corporation ordinary shares were issued in exchange for 4,000 preference shares.

Instructions

(a) In general, what are the objectives of a statement of the type shown above for Maloney Corporation? Explain.

(b) Identify the weaknesses in the form and format of Maloney Corporation’s statement of cash flows without reference to the additional information. (Assume adoption of the indirect method.)

(c) For each of the six items of additional information for the statement of cash flows, indicate the preferable treatment and explain why the suggested treatment is preferable.

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MALONEY CORPORATION STATEMENT OF SOURCES AND USES OF CASH FOR THE YEAR ENDED SEPTEMBER 30, 2015 Net income Sources of cash Depreciation and depletion Increase in long-term debt Changes in current receivables and inventories, less current liabilities (excluding current maturities of long-term debt) Application of cash Cash dividends Expenditure for property, plant, and equipment Investments and other uses Change in cash $111,000 70,000 179,000 14,000 $374,000 $ 60,000 214,000 20,000 80,000 $374,000