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The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

Issued 50,000 shares of capital stock in exchange for $500,000 in cash.

Purchased equipment at a cost of $80,000. $30,000 cash was paid and a note payable was signed for the balance owed.

Purchased inventory on account at a cost of $130,000. The company uses the perpetual inventory system.

Credit sales for the month totaled $140,000. The cost of the goods sold was $90,000.

Paid $7,000 in rent on the warehouse building for the month of March.

Paid $8,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018.

Paid $90,000 on account for the merchandise purchased in 3.

Collected $75,000 from customers on account.

Recorded depreciation expense of $3,000 for the month on the equipment.

Required: 1. Analyze each transaction by indicating the cash effect and classify each as a financing, investing, and/or operating activity (a transaction can represent more than one type of activity). 2. Prepare a statement of cash flows, using the direct method to present cash flows from operating activities. Assume the cash balance at the beginning of the month was $60,000.

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