Statement of Cash Flows—Direct Method The comparative balance sheet of Canace Pr
ID: 2401002 • Letter: S
Question
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 Canace Products Inc. Statement of Cash Flows For the Year Ended December 31, 20Y6 Cash flows from operating activities: Net cash flow from operating activities Cash flows from (used for) investing activities: Net cash flow used for investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities Cash at the beginning of the year Cash at the end of the yearExplanation / Answer
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
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