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Statement of Cash Flows—Direct Method The comparative balance sheet of Canace Products Inc. for December 31,...

Statement of Cash Flows—Direct Method

The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:

Dec. 31, 20Y6 Dec. 31, 20Y5
Assets
Cash $303,670 $282,160
Accounts receivable (net) 110,010 101,340
Inventories 310,560 300,040
Investments 0 116,240
Land 159,280 0
Equipment 342,630 265,270
Accumulated depreciation-equipment (80,220) (71,530)
Total assets $1,145,930 $993,520
Liabilities and Stockholders' Equity
Accounts payable $207,410 $195,720
Accrued expenses payable 20,630 25,830
Dividends payable 11,460 8,940
Common stock, $10 par 61,880 48,680
Paid-in capital: Excess of issue price over par-common stock 232,620 135,120
Retained earnings 611,930 579,230
Total liabilities and stockholders’ equity $1,145,930 $993,520

The income statement for the year ended December 31, 20Y6, is as follows:

Sales $1,756,110
Cost of merchandise sold 723,100
Gross profit $1,033,010
Operating expenses:
Depreciation expense $8,690
Other operating expenses 911,910
Total operating expenses 920,600
Operating income $112,410
Other expense:
Loss on sale of investments (31,380)
Income before income tax $81,030
Income tax expense 25,930
Net income $55,100

Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows:

  1. Equipment and land were acquired for cash.
  2. There were no disposals of equipment during the year.
  3. The investments were sold for $84,860 cash.
  4. The common stock was issued for cash.
  5. There was a $22,400 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Canace Products Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y6
Cash flows from operating activities:
$
Net cash flow from operating activities $
Cash flows from (used for) investing activities:
$
Net cash flow used for investing activities
Cash flows from (used for) financing activities:
$
Net cash flow from financing activities
$
Cash at the beginning of the year
Cash at the end of the year $

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ekkarill92 answered 2 years ago
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