Statement of cash flows-direct method applied to PR 13-1A Instructions Labels an

Question

Statement of cash flows-direct method applied to PR 13-1A Instructions Labels and Amount Descriptions Statement of Cash Flows Instructions The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows Dec. 31, 20Y3 Dec. 31, 20Y2 Assets 150,000.00 400,000.00 750,000.00 100,000.00 0.00 1,200,000.00 (500,000.00) $2,675,000.00 2,100,000.00 $155,000.00 450,000.00 770,000.00 0.00 500,000.00 1400,000.00 (600,000.00) 3Cash 4 Accounts receivable (net) 5Inventories 7 Land 8Equipment 9Accumulated depreciation-equipment 10 Total assets Liabilities and Stockholders' Equity 12 Accounts payable (merchandise creditors) 13 Accrued expenses payable (operating expenses) 14 Dividends payable 15 Common stock, $4 par 16 Paid-in capital: Excess of issue price over par-common stock 17 Retained 18Total liabilities and stockholders' equity 300,000.00 50,000.00 25,000.00 600,000.00 175,000.00 950,000.00 $2,675,000.00 2,100,000.00 $340,000.00 45,000.00 30,000.00 700,000.00 200,000.00 1360,000.00 earnings

Explanation / Answer

Workings:

Livers Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 1 Cash flows from operating activities: 2 Cash received from customers 2950000.00 3 Cash payments for merchandise -1380000.00 4 Cash payments for operating expenses -955000.00 5 Cash payments for income taxes -125000.00 6 Net cash flow from operating activities 490000.00 7 8 Cash flows from investing activities: 9 Cash received from sale of investments 175000.00 10 Cash paid for purchase of land -500000.00 11 Cash paid for purchase of equipment -200000.00 12 Net cash flow used for investing activities -525000.00 13 14 Cash flows from financing activities: 15 Cash received from sale of common stock 125000.00 16 Cash paid for dividends (25000 + 90000 - 30000) -85000.00 17 Net cash flow from financing activities 40000.00 18 Change in cash 5000.00 19 Cash at the beginning of the year 150000.00 20 Cash at the end of the year 155000.00

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