Cash Flows from Inve. s I Vie Online teaching and a se line RUSSELL CORPORATION

Question

Cash Flows from Inve. s I Vie Online teaching and a se line RUSSELL CORPORATION COMPARATIVE BALANCE SHEETS DECEMBER 31, 2016 and 2015 2016 2015 ASSETS s 61,725 38,550 120,300 7,550 131,125 (55.375) $303,875 $ 30,775 40,375 125,350 8,500 100,000 Cash Merchandise Inventory Prepaid Expenses Equipment Total Assets Liabilities &Equity; Accounts Payable Short-term Notes Payable Long-term Notes Payable Common Stock, $5 par $ 8,875 7,500 50,000 107,500 15,000 115.000 $ 51,000 5,000 38,750 100,000 PIC excess par Retained Earnings Total Liabilities & Equity 03,875 $252.500 $257.500 RUSSELL CORPORATION INCOME STATEMENT YEAR ENDED 12/31/16 Sales $592,500 Cost of Goods Sold 297.500 Gross Profit $295,000

Explanation / Answer

RUSSELL COMPANY

RUSSELL COMPANY

Statement of Cash Flows For the Year Ended December 31, 2016 Amount ($) Amount ($) Cash flows from operating activities Net income 79,050 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 19,300 Loss on sale of the Equipment 1,050 Decrease in Accounts Receivable 1,825 Decrease in prepaid Expenses 950 Decrease in Inventory 5,050 Decrease in Accounts payable -42,125 Increase in Notes payable 2500 -11,450 Net cash provided by operating activities (A) 67,600 Cash flows from investing activities Sale of Equipment 13,025 Purchase of equipment -21,625 Net cash used by investing activities (B) -8,600 Cash flows from financing activities -8,600 Issuance of common stock 22,500 Long term notes payable -23,750 Payment of cash dividends -26,800 Net cash used by financing activities (C) -28,050 Net increase in cash (A+B+C) 30,950 Cash at beginning of period 30,775 Cash at end of period 61,725 61725 Non cash investing activities Equipment costing 56625 is purchased with cash 21625 and the balance of 35000 with long term notes payable is non cash item shown separately as a note to accounts Workings for direct method Sales 592500 Add: decrease in Accounts receivable 1,825 cash receiaved from customers 594325 Cost of goods sold 297500 Less: decrease in inventory -5,050 Add: decrease in accounts payable 42,125 cash paid to suppliers 334575 Income tax expenses 14175 Expenses 181425 Less: prepaid expenses 950 Total other Expenses 180475 Short term notes 2500 Direct Method cash flow statement Amount Cash Flow from operating Activities cash received from customers 594325 cash Paid to suppliers -334575 cash paid to other Expenses -180475 cash paid to Short term notes 2500 cash paid to Income tax expenses -14175 Net cash flow from operating Activities 67600

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