s had a cash balance on December 31, 20x0, of $45,000. Its net income for 20X1 w

Question

s had a cash balance on December 31, 20x0, of $45,000. Its net income for 20X1 was $375.000 Its 20X1 transactions affecting income or cash were (in thousands): I. Sales of S1,560, all on credit. Cash collections from customers, $1,300. 2 The cost of items sold. $875, Purchases of inventory totaled $900, inventory and accounts payable were affected accordingly 3. Cash payments on trade accounts payable, $800. 4. Salaries and wages: accrued, $175; paid in cash, $160. 5. Depreciation, 6. Interest expense, all paid in cash, $11. 7. Other expenses, all paid in cash, S110. 8. Income taxes accrued, $40; income taxes paid in cash, S35. 9. Bought plant and facilities for $255 cash. $42. 10. Issued debt for $115 cash. 11. Paid cash dividends of $49. A. Prepare a statement of cash flo ws using the direct method for reporting cash flows from operating activities. (Omit any supporting schedules).

Explanation / Answer

Ridgewood Antiques Statement of Cash Flows For the Year ended December 31, 20X1 Cash Flows from Operating Activities Cash received from Customers $         1,300 Cash paid for accounts payable $           -800 Cash paid for Salaries & Wages $           -160 Cash paid for interest expenses $             -11 Cash paid for other expenses $           -110 Cash paid for income taxes $             -35 Net Increase/Decrease in Cash $             184 Opening Cash Balance (1st January, 20X1) $       45,000 Closing Cash Balance (31st December, 20X1) $       45,184

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