Problem - The accounting staff of Harris Company has assembled the following information for the year ended December 31, 2011:

Cash Sales - $800,000

Credit Sales - 2,500,000

Collections of accounts receivable - 2,200,000

Cash transferred from the money market fund to the general bank account - 250,000

Interest and dividends received - 100,000

Purchases (all on account) - 1,800,000

Payments on accounts payable to merchandise suppliers - 1,500,000

Cash payments for operating expenses - 1,050,000

Interest paid - 180,000

Income taxes paid - 95,000

Loans made to borrowers - 500,000

Collection on loans (excluding receipts of interest) - 260,000

Cash paid to acquire plant assets - 3,100,000

Book value of plant assets sold - 660,000

Loss on sales of plant assets - 80,000

Proceeds from issuing bonds payable - 2,500,000

Dividends paid - 120,000

Cash and cash equivalents, Jan. 1 - 489,000

Instructions -

Prepare a statement of cash flows. Place brackets around amounts representing cash outflows. Use the direct method of reporting cash flows from operating activities.

Some of the items above will be listed in your statement without change. However, you will have to combine given information to compute the amounts of (1) collections from customers, (2) cash paid to suppliers and employees, and (3) proceeds from sales of plant assets. (Hint: Not every item listed is used in preparing a statement of cash flows.)