The owner of a small business has asked you to prepare a statement that will show him where his firm’s cash came from and how it was used this year. He gives you the following information based on the Cash account in his general ledger:Balance at beginning of year $ 3,450 Collection of accounts receivable 34,500 Interest on savings account 345 Sale of old machine 3,105 Cash sales 27,600 Total 69,000 Payment on vendor accounts $17,250 Cash purchase of supplies 345 Cash purchase of inventory 17,250 Down payment on new truck 3,450 Rent payments 8,625 Utilities 2,070 Interest payment 1,035 Other miscellaneous expenses 1,725 Payment on debt 3,450 Part-time help 6,90062,100 Balance at end of year $ 6,900In addition, the following is available from company records:1.Sales were $61,410 for the year.2.The Accounts Receivable balance decreased by $690.3.Cash operating expenses totaled $54,165 (including cost of sales, supplies, rent, utilities, part-time help, and other miscellaneous expenses).4.Accounts Payable decreased by a net of $2,760 during the year.5.The Inventory balance remained constant throughout the year.6.Depreciation of $1,725 was taken this year.Required:Prepare a cash flow statement using the direct method.