Homework SourseStatement of Cash FlowsDirect Method The comparative balance
Statement of Cash Flows—Direct Method
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
The income statement for the year ended December 31, 20Y6, is as follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows:
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $84,150 cash.
The common stock was issued for cash.
There was a $22,200 debit to Retained Earnings for cash dividends declared.
Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash or any payments, decreases in cash or any negative adjustments.
| Dec. 31, 20Y6 | Dec. 31, 20Y5 | ||||
| Assets | |||||
| Cash | $302,540 | $279,810 | |||
| Accounts receivable (net) | 109,600 | 100,490 | |||
| Inventories | 309,390 | 297,550 | |||
| Investments | 0 | 115,270 | |||
| Land | 158,690 | 0 | |||
| Equipment | 341,350 | 263,060 | |||
| Accumulated depreciation-equipment | (79,920) | (70,940) | |||
| Total assets | $1,141,650 | $985,240 | |||
| Liabilities and Stockholders\' Equity | |||||
| Accounts payable | $206,640 | $194,090 | |||
| Accrued expenses payable | 20,550 | 25,620 | |||
| Dividends payable | 11,420 | 8,870 | |||
| Common stock, $10 par | 61,650 | 48,280 | |||
| Paid-in capital: Excess of issue price over par-common stock | 231,750 | 133,990 | |||
| Retained earnings | 609,640 | 574,390 | |||
| Total liabilities and stockholders’ equity | $1,141,650 | $985,240 |
Solution
Answers
Inventory
Cost of Goods Sold
Accounts Payable
Cost of Goods Sold
$ 743,700.00
$ 743,700.00
Beginning balance
$ (297,550.00)
$ 194,090.00
Ending Balance
$ 309,390.00
$ (206,640.00)
Inventory Purchased [total]
$ 755,540.00
$ 755,540.00 [figure from ‘inventory column’]
Cash paid to supplier for purchase [TOTAL]
$ 742,990.00
Accounts receivables
Sales
$ 1,806,110.00
Ending Balance
$ (109,600.00)
Beginning Balance
$ 100,490.00
Cash collected from Customers
$ 1,797,000.00
Accrued Expense Payable
Beginning Balance
$ 25,620.00
Other Operating Expenses
$ 937,820.00
Ending balance
$ (20,550.00)
Cash paid for operating expenses
$ 942,890.00
Cash Flows from Operating Activities:
Cash collected from Customers
$ 1,797,000.00
Cash paid to supplier for purchase [TOTAL]
$ (742,990.00)
Cash paid for operating expenses
$ (942,890.00)
Cash paid for Income taxes
$ (27,040.00)
Net Cash flow from Operating activities
$ 84,080.00
Cash Flows from (used for) Investing Activities:
Sale of Investments
$ 84,150.00
Land acquired
$ (158,690.00)
Equipment acquired
$ (78,290.00)
Net Cash flow used for Investing activities
$ (152,830.00)
Cash Flows (used for) financing activities:
Dividend paid
$ (19,650.00)
Common Stock issued
$ 111,130.00
Net Cash Flow from Financing Activities
$ 91,480.00
Net Increase in Cash
$ 22,730.00
Cash at the beginning of the year
$ 279,810.00
Cash at the end of the year
$ 302,540.00
| Inventory | Cost of Goods Sold | Accounts Payable | |
| Cost of Goods Sold | $ 743,700.00 | $ 743,700.00 | |
| Beginning balance | $ (297,550.00) | $ 194,090.00 | |
| Ending Balance | $ 309,390.00 | $ (206,640.00) | |
| Inventory Purchased [total] | $ 755,540.00 | $ 755,540.00 [figure from ‘inventory column’] | |
| Cash paid to supplier for purchase [TOTAL] | $ 742,990.00 |
