The Following Cash Flow Data of Signet Sales for the Year

The following cash flow data of Signet Sales for the year ended December 31, 2005 are as follows: $$\begin{array} { | l | r | } \hline \text { Cash payment of dividends } & \$ 70,000 \\\hline \text { Purchase of land } & \$ 28,000 \\\hline \text { Cash payments for interest } & \$ 20,000 \\\hline \text { Cash payments for salaries } & \$ 90,000 \\\hline \text { Sale of equipment } & \$ 76,000 \\\hline \text { Retirement of common stock } & \$ 50,000 \\\hline \text { Purchase of equipment } & \$ 60,000 \\\hline \text { Cash payment to suppliers } & \$ 170,000 \\\hline \text { Cash collection from customers } & \$ 500,000 \\\hline \text { Cash at beginning of year } & \$ 100,000 \\\hline\end{array}$$
a. Prepare a statement of cash flows for Signet Sales in accordance using the direct method in accordance with SFAS 95
b. Discuss, from an analyst's viewpoint, the purpose of classifying cash flows into the categories required by SFAS 95