To prepare the statement of cash flows, accountants for Toil-Free Calling, Inc., have summarized 2008 activity in the Cash account as follows:

Requirement

Prepare the statement of cash flows of Toil-Free Calling, Inc., for the year ended December 31, 2008, using the direct method for operating activities. Follow the statement format given in Exhibit 16A-3.

Exhibit 16A-3

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Beginning balance Receipts of interest Collections from customers Cash 22,600 Payments on accounts payable 17,100 Payments of dividends 399,100 27,200 673,700 Payments of salaries and wages 143,800 Issuance of common stock 47,300 Payments of interest 26,900 Purchase of equipment 10,200 Payments of operating expenses 34,300 Payment of note payable 67,700 Payment of income tax 18,900. Ending balance 32,600