Additional information: Accounts payable pertain to the purchase of inventory. P

Question

Additional information:

Accounts payable pertain to the purchase of inventory.

Plant assets were sold for $40,000. The cost of the plant assets was $40,000.

All dividends are cash.

PLEASE STATE IF ANSWERS ARE CASH IS "USED IN" OR CASH IS "PROVIDED BY"

Cash received/collected from customers is:

Purchases for the year is:

Cash paid to suppliers is:

Depreciation expense is:

Cash paid for operating expenses is:

Cash paid for interest is:

Cash paid for income taxes is:

Cash provided by/(used in)* operating activities is:

Cash provided by/(used in)* investing activities is:

Cash paid for dividends is:

Cash provided by/(used in)* financing activities is:

If Rent Expense for the period was $20,000, the Cash paid for Prepaid Rent is:

If your answer is cash “used in”, you must indicate this by writing your answer in parenthesis. For example, ($10,000). If your answer is cash “provided by”, you must write your answer without parentheses.

Balance Sheet December 31 2005 Assets Cash Accounts receivable Inventories Prepaid Rent Investments Plant assets Accumulated depreciation $ 20,000 160,000 80,000 15,000 100,000 210,000 $ 10,000 110,000 50,000 10,000 75,000 250,000 (65.000) 60,000 Total 000 $445,000 Liabilities and Stockholders' Equi Accounts payable Interest payable Income tax payable Note payable Common stock Retained eamings $ 50,000 20,000 5,000 130,000 155,000 160,000 $ 40,000 5,000 10,000 140,000 100,000 150,000 $445.000 Total Income Statenent For the Year Ended December 31, 2005 Sales Cost of goods sold Gross Profit Operating expenses (including Depreciation Expense) Interest expense Income tax expense $800,000 480,000 320,000 120,000 20,000 25.000 Total 165,000 155,000 5,000 S 160.000 Income before Gains and Losses ai n on sale of plant asset Net income

Explanation / Answer

Cash received/collected from customers is: Sales 800000 Add: Opening Accounts Receivable 110000 Less: Ending Accounts Receivable -160000 1 Cash received from customers 750000 Purchases for the year is: Cost of goods sold 480000 Add: Increase in inventory 30000 Total purchases 510000 Cash paid to suppliers is: Total Purchases 510000 Add: Opening Accounts Payable 40000 Less: Ending Accounts Payable -50000 2 Cash paid to supplier 500000 Depreciation expense is: Increase in accumulated depreciation 5000 Depreciation on plant assets sold(40000cost-(40000Sale value-5000gain=35000Book value)) 5000 Depreciation expense 10000 Cash paid for operating expenses is: Total operating expenses 120000 Less: Depreciation expense -10000 Add: increase in prepaid rent 5000 3 Cash paid for operating expense 115000 Cash paid for interest is: Interest expense 20000 Add: Interest payable beginning 5000 Less: Interest payable ending -20000 4 Cash paid for interest 5000 Cash paid for income taxes is: Income tax expense 25000 Add: income tax payable beginning 10000 Less: income tax payable ending -5000 5 Cash paid for income tax 30000 Cash provided by/(used in)* operating activities is: 1-2-3-4-5 100000 Cash provided by/(used in)* investing activities is: Sale of plant assets 40000 Purchase of investment -25000 Cash provided by investing activities 15000 Cash paid for dividends is: Beginning retained earning 150000 Add: Net Income 160000 Less: Ending retained earning -160000 Cash dividend paid 150000 Cash provided by/(used in)* financing activities is: Payment of notes payable -10000 Cash dividend paid -150000 Issue of common stock 55000 Cash used in financing activities -105000 If Rent Expense for the period was $20,000, the Cash paid for Prepaid Rent is: (20000+5000) 25000 Net increase in cash(100000+15000-105000) 10000 Opening cash 10000 ending cash 20000

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