Los Lobos Corp. uses the direct method to prepare its statement of cash flows. R

Question

Los Lobos Corp. uses the direct method to prepare its statement of cash flows. Relevant balances for Los Lobos at December 31, 2014 and 2013, are as follows.

Debits 2014 2013 Cash $35,150 $32,230 Accounts receivable 32,800 30,020 Inventory 30,640 47,240 Property, plant, & equipment 104,750 98,000 Unamortized bond discount 4,410 5,150 Cost of goods sold 250,070 379,010 Selling expenses 141,520 171,800 General and administrative expenses 137,570 151,860 Interest expense 4,140 2,930 Income tax expense 20,100 60,720 $761,150 $978,960 Credits Allowance for doubtful accounts $1,810 $1,190 Accumulated depreciation—plant assets 16,494 13,020 Accounts payable 25,360 17,310 Income taxes payable 20,400 29,280 Deferred income taxes 5,030 4,010 8% callable bonds payable 44,860 20,520 Common stock 55,170 41,300 Paid-in capital in excess of par 9,110 7,980 Retained earnings 44,310 64,250 Sales revenue 538,606 780,100 $761,150 $978,960 Additional information: 1. Los Lobos purchased $6,750 in equipment during 2014. 2. Los Lobos allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses. 3. Bad debt expense for 2014 was $5,340, and write-offs of uncollectible accounts totaled $4,720. Determine what amounts Los Lobos should report in its statement of cash flows for the year ended December 31, 2014, for the following items. A) Cash collected from customers. B) Cash paid to suppliers. C) Cash paid for interest. D) Cash paid for income taxes. E) Cash paid for selling expenses.

Explanation / Answer

maximum of 4 questions will be answered at one go

B) Cash paid to suppliers (30640+250070-47240)-25360+17310 =    225,420 C) Cash paid for interest         4,140 D) Cash paid for income taxes 29280+20100-20400 =      28,980 E) Cash paid for selling exp 141520-((16494-13020)/3) =    140,362

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