Ericka Dunlap is preparing a statement of cash flows using the direct method. Ericka has identified several items that may or may not be used in preparing the statement of cash flows, including:

Item 1: A delivery vehicle was purchased using preferred stock.

Item 2: Convertible preferred stock was converted to common stock.

Item 3: Equipment was obtained via a finance lease obligation.

Item 4: The company received an EPA fine, which was immediately paid.

Which of the items identified by Ericka would directly affect the statement of cash flows?

Item 1

Item 3

Item 4

Item 2