Greco Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information.

Additional data related to 2019 are as follows.
1. Equipment that had cost $11,000 and was 30% depreciated at time of disposal was sold for $2,500.
2. $5,000 of the long-term note payable was paid by issuing ordinary shares.
3. Cash dividends paid were $5,000.
4. On January 1, 2019, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,000 (net of $4,000 taxes).
5. Equity investments (non-trading) were sold at $1,500 above their cost. The company has made similar sales and investments in the past.
6. Cash and a long-term note for $16,000 were given for the acquisition of equipment.
7. Interest of $2,000 and income taxes of $5,000 were paid in cash.
Instructions
a. Use the indirect method to analyze the above information and prepare a statement of cash flows for Greco.
b. What would you expect to observe in the operating, investing, and financing sections of a statement of cash flows of:
1. A severely financially troubled firm?
2. A recently formed firm that is experiencing rapid growth?

December 31 2019 2018 $ 38,500 $13,000 Cash Accounts receivable 12,250 10,000 Inventory 12,000 10,000 Equity investments (non-trading) -0- 3,000 -0- 29,750 Buildings Equipment 40,000 20,000 Copyright 5,000 5,250 $107,750 $91,000 Totals $ 3,000 $ 4,500 Allowance for doubtful accounts Accumulated depreciation-equipment 2,000 4,500 Accumulated depreciation-buildings -0- 6,000 Accounts payable 5,000 4,000 Dividends payable -0- 5,000 3,000 Notes payable, short-term (non-trade) 4,000 Long-term notes payable 36,000 25,000 Share capital-ordinary 38,000 33,000 Retained earnings 20,750 5,000 $107,750 $91,000