The following information pertains to Peak Heights Company: Income Statement for
ID: 2591280 • Letter: T
Question
The following information pertains to Peak Heights Company: Income Statement for Current Year Sales Expenses $ 85,400 Cost of goods sold Depreciation expense Salaries expense $51,775 7,500 11,500 70,775 Net income $ 14,625 Current Prior year Partial Balance Sheet Accounts receivable Inventory Salaries payable year 11,400 $ 12,900 9,800 890 13,800 1,730 Required Present the operating activities section of the statement of cash flows for Peak Heights Company using the direct method. (List cash outflows as negative amounts.) PEAK HEIGHTS COMPANY Statement of Cash Flows (Partial) Cash flows from operating activities Cash collected from customers Cash payments to employees Cash payments to employees Cash payments to suppliers of inventoryExplanation / Answer
PEAK HEIGHTS Company Statement of cash flow Cash flow from operating activity Cash Collected from customers 83,900 Cash Payment to employees 55,775 Cash Payment to Supplies of inventory 12,340 Cash flow from operating activity 152,015 Cash Collected from customers Accounts Receivable Opening 11,400 Add Sales During the year 85,400 Less Accounts Receivable Closing 12,900 Cash Collection from Customers 83,900 Cash Payment to employees Inventory Balance Opening 13,800 Add Cost of goods sold 51,775 Less Inventory Balance Closing 9,800 Cash Payment to employees 55,775 Cash Payment to Supplies of inventory Salaries Payable 1,730 Add Salaries Expenses 11,500 Less Salaries payable Closing 890 Cash payment to suppliers 12,340
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