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Dec. 31, 20Y6 Dec. 31, 20Y5 Assets Cash $273,020 $256,310 Accounts receivable (net) 98,900 92,060 Inventories...

Dec. 31, 20Y6 Dec. 31, 20Y5 Assets Cash $273,020 $256,310 Accounts receivable (net) 98,900 92,060 Inventories 279,200 272,560 Investments 0 105,590 Land 143,210 0 Equipment 308,050 240,970 Accumulated depreciation-equipment (72,120) (64,980) Total assets $1,030,260 $902,510 Liabilities and Stockholders' Equity Accounts payable $186,480 $177,790 Accrued expenses payable 18,540 23,470 Dividends payable 10,300 8,120 Common stock, $10 par 55,630 44,220 Paid-in capital: Excess of issue price over par-common stock 209,140 122,740 Retained earnings 550,170 526,170 Total liabilities and stockholders’ equity $1,030,260 $902,510 The income statement for the year ended December 31, 20Y6, is as follows: Sales $1,463,260 Cost of merchandise sold 602,500 Gross profit $860,760 Operating expenses: Depreciation expense $7,140 Other operating expenses 759,960 Total operating expenses 767,100 Operating income $93,660 Other expense: Loss on sale of investments (28,510) Income before income tax $65,150 Income tax expense 20,850 Net income $44,300 Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows: Equipment and land were acquired for cash. There were no disposals of equipment during the year. The investments were sold for $77,080 cash. The common stock was issued for cash. There was a $20,300 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: Cash received from customers $ 1,456,420 Cash payments for merchandise 593,810 Cash payments for operating expenses Cash payments for income taxes Net cash flow from operating activities $ Cash flows from (used for) investing activities: Cash from sale of investments $ Cash used for purchase of land Cash used for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash from sale of common stock $ Cash used for dividends Net cash flow from financing activities Increase in cash $ Cash at the beginning of the year Cash at the end of the year

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CANACE PRODUCTS INC
Statement of Cash Flows
For the Year Ended December 31, 20Y6
Cash Flows from Operating Activities:
Cash received from customers 1456420
Cash payments for merchandise -600450
Cash payments for operating expenses -764890
Cash payments for income taxes -20850
Net cash flow from operating activities 70230
Cash Flows from (used for) Investing Activities:
Cash from sale of investments 77080
Cash used for purchase of land -143210
Cash used for purchase of equipment (308050 - 240970) -67080
Net cash flow used for investing activities -133210
Cash Flows from (used for) Financing Activities:
Cash from sale of common stock 97810
Cash used for dividends -18120
Net cash flow from financing activities 79690
Increase in cash 16710
Cash at the beginning of the year 256310
Cash at the end of the year 273020

Working:

Cash received from customers:
Sales 1463260
Less: Increase in Accounts Receivable (98900 - 92060) 6840
1456420
Cash payments for merchandise:
Cost of merchandise sold 602500
Add: Increase in Inventory (279200 - 272560) 6640
Less: Increase in Accounts Payable (186480 - 177790) 8690
600450
Cash payments for operating expenses:
Other operating expenses 759960
Add: Decrease in accrued expenses payable (23470 - 18540) 4930
764890
Cash used for dividends:
Dividends payable, Dec. 31, 20Y5 8120
Add: Cash dividends declared 20300
28420
Less: Dividends payable, Dec. 31, 20Y6 10300
18120

ekkarill92 answered 2 years ago
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