Exercise 12-14 The following information is available for Wildhorse Co. for 2017

ID: 2520698 • Letter: E

Question

Exercise 12-14 The following information is available for Wildhorse Co. for 2017 Cash used to purchase treasury stock Cash dividends paid Cash paid for interest Net income Sales revenue Cash paid for taxes Cash received from customers Cash received from sale of building (at book value) Cash paid for operating expenses Beginning cash balance Cash paid for goods and services Cash received from issuing common stock Cash paid to redeem bonds at maturity Cash paid to purchase equipment $169,793 76,954 79,072 1,638,979 2,831,060 349,470 1,998,333 697,528 271,810 38,830 985,223 1,253,150 706,000 399,596 Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

CASH FLOW STATEMENT- DIRECT METHOD

CASH FROM OPERATING ACTIVITIES

Cash received from customers

1998333

Cash paid for operating expenses

-271810

Cash paid for goods and services

-985223

Cash generated from operations before taxes and extraordinary items

741300

less: taxes paid

-349470

Net cash flow from operations

391830

CASH FLOW FROM INVESTING ACTIVITIES

Cash paid to Purchase equipment

-399596

Cash received from sale of building

697528

Net cash flow from investing activities

297932

CASH FLOW FROM FINANCING ACTIVITIES

Cash used to pay treasury stock

-169793

Cash dividends paid

-76954

Cash paid for interest

-79072

Cash received from issuing common stock

1253150

Cash paid to redeem bonds at maturity

-706000

Net cash flow from Financing activities

221331

Total cash flow

911093

Add: Opening balance of cash

38830

Closing balance of cash

949923