2014 Additional information provided: • Equipment costing $52,000 was purchased
ID: 2462182 • Letter: 2
Question
2014
Additional information provided:
• Equipment costing $52,000 was purchased for cash.
• Equipment with a net asset value of $10,000 was sold for $14,000
• Depreciation expense of $12,000 was recorded during the year.
• During 2014, the company repaid $40,000 of long-term notes payable.
• During 2014, the company borrowed $34,000 on a new note payable
• There were no stock retirements during the year.
• There were no sales of treasury stock during the year.
Please prepare a complete statement of cash flows using the direct method, in the following format:
Explanation / Answer
$
$
Operating Activities
Working
Receipt
$
Collection from Customer
2,44,000
Op. Receivable
35,000
Int Revenue
1,000
Add:
Sales Rev
2,40,000
Total Cash Receipt (A)
2,45,000
2,45,000
Less
Cl Recv
31,000
Payments
Colln fm cust
2,44,000
To Supplier
1,40,000
To Employee
67,000
Op Payable
6,000
$
For Interest
1,000
Add
Purchased
1,38,000
Cogs
1,10,000.00
Income Tax Exp
5,000
Less
Cl payable
4,000
Less
Inventory
25,000.00
Total Cash Payments (B)
2,13,000
2,13,000
Pmt to Suppl
1,40,000
add
Cl Stock
53,000.00
Net Cash fm Op. Activities (A-B)
32,000
Purchased
1,38,000.00
Pmt to Employee
Investment Activities
Acc Liab
1,000
Proceeds from Sale of Assets
14,000
Add
Sal
45,000
Acquisition of Equipment
52,000
-38,000
Add
Other Op exp
23,000
Less
Cl Acc Liab
2,000
Financing Activities
67,000
Issuance of Stock
25,000
Purchase of Treasury Stock
Op Value of Equip
90,000
Borrowing of Notes Payable
34,000
Add
Equip Purchased
52,000
Repayment of Notes Payable
40,000
Less:
Depn fro the yr
12,000
Dividend
10,000
Less:
Equip Sold
10,000
Net Cash form Financing activities
9,000
9,000
Cl value of Equip
1,20,000
Net Cash Balance
3,000
Op Long term note
90,000
Cash Balance Dec 2013
18,000
Note payable
40,000
Cash Balance Dec 2014
21,000
$
$
Operating Activities
Working
Receipt
$
Collection from Customer
2,44,000
Op. Receivable
35,000
Int Revenue
1,000
Add:
Sales Rev
2,40,000
Total Cash Receipt (A)
2,45,000
2,45,000
Less
Cl Recv
31,000
Payments
Colln fm cust
2,44,000
To Supplier
1,40,000
To Employee
67,000
Op Payable
6,000
$
For Interest
1,000
Add
Purchased
1,38,000
Cogs
1,10,000.00
Income Tax Exp
5,000
Less
Cl payable
4,000
Less
Inventory
25,000.00
Total Cash Payments (B)
2,13,000
2,13,000
Pmt to Suppl
1,40,000
add
Cl Stock
53,000.00
Net Cash fm Op. Activities (A-B)
32,000
Purchased
1,38,000.00
Pmt to Employee
Investment Activities
Acc Liab
1,000
Proceeds from Sale of Assets
14,000
Add
Sal
45,000
Acquisition of Equipment
52,000
-38,000
Add
Other Op exp
23,000
Less
Cl Acc Liab
2,000
Financing Activities
67,000
Issuance of Stock
25,000
Purchase of Treasury Stock
Op Value of Equip
90,000
Borrowing of Notes Payable
34,000
Add
Equip Purchased
52,000
Repayment of Notes Payable
40,000
Less:
Depn fro the yr
12,000
Dividend
10,000
Less:
Equip Sold
10,000
Net Cash form Financing activities
9,000
9,000
Cl value of Equip
1,20,000
Net Cash Balance
3,000
Op Long term note
90,000
Cash Balance Dec 2013
18,000
Note payable
40,000
Cash Balance Dec 2014
21,000
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