Preparing the statement of cash flows from the cash T-account

The following cash T-account for Holcomb Manufacturing summarizes all the transactions affecting cash during 2012.

Cash

Beginning balance

8,000

Inventory purchases

27,000

Sales of inventories

34,000

Accounts payable payments

7,000

Receivable collections

40,000

Bank loan principal payments

10,000

Sales of long-term “investments

12,500

Loan interest

3,000

Issuance of common stock

14,000

Wages

16,000

Long-term borrowings

9,000

Dividend payments

4,000

Administrative expenses

12,000

Equipment purchases

11,000

a. Compute the ending cash balance.

b. Prepare a statement of cash flows (direct method).