Operating activities—direct method (Learning Objective 4) 5–10 min.

Nemo’s Spas began 2014 with cash of $32,000. During the year, Nemo’s Spas earned service revenue of $610,000 and collected $572,000 from customers. Expenses for the year totaled $449,000, of which Nemo’s Spas paid $417,000 in cash to suppliers and employees. Nemo’s Spas also paid $84,000 to purchase equipment and paid a cash dividend of $57,000 to its stockholders during 2014. Prepare the company’s statement of cash flows for the year ended December 31, 2014. Format cash flows from operating activities by the direct method.

AppendixLO1