The Electric Company engaged in the following transactions during 2014. The beginning cash balance was $43,000 and ending cash balance was $48,600.
1. Sales on account were $274,000. The beginning receivables balance was $86,000 and the ending balance was $74,000.
2. Salaries expense was $115,000. The beginning salaries payable balance was $9,600 and the ending balance was $7,500.
3. Other operating expenses were $118,000. The beginning other Operating Expenses Payable balance was $8,500 and the ending balance was $6,000.
4. Recorded $25,000 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $18,000 and $43,000, respectively.
5. The Equipment account had beginning and ending balances of $28,000 and $42,000, respectively. There were no sales of equipment during the period.
6. The beginning and ending balances in the Notes Payable account were $38,000 and $32,000, respectively. There were no notes payable issued during the period.
7. There was $4,600 of interest expense reported on the income statement. The beginning and ending balances in the Interest Payable account were $6,400 and $6,200, respectively.
8. The beginning and ending Merchandise Inventory account balances were $26,000 and $32,500, respectively. The company sold merchandise with a cost of $119,000. The beginning and ending balances of Accounts Payable were $10,000 and $12,500, respectively.
9. The beginning and ending balances of Notes Receivable were $80,000 and $20,000, respectively. Notes receivable result from long-term loans made to creditors. There were no loans made to creditors during the period.
10. The beginning and ending balances of the Common Stock account were $140,000 and $190,000, respectively. The increase was caused by the issue of common stock for cash.
11. Land had beginning and ending balances of $48,000 and $28,000, respectively. Land that cost $20,000 was sold for $16,000, resulting in a loss of $4,000.
12. The tax expense for the period was $6,600. The Tax Payable account had a $3,200 beginning balance and a $2,800 ending balance.
13. The Investments account had beginning and ending balances of $10,000 and $30,000, respectively. The company purchased investments for $40,000 cash during the period, and investments that cost $20,000 were sold for $26,000, resulting in a $6,000 gain.

Required
a. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows.
If an item does not affect the cash flow statement, make a statement indicating that the cash flow statement will not be affected. Assume The Electric Company uses the direct method for showing net cash flow from operating activities.
b. Prepare a statement of cash flows based on the information you developed in Requirement a.