Question

The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31.

Cash and cash equivalents, Jan. 1	$	35,800
Cash and cash equivalents, Dec. 31		137,700
Cash paid to acquire plant assets		22,000
Proceeds from short-term borrowing		10,000
Loans made to borrowers		4,200
Collections on loans (excluding interest)		4,000
Interest and dividends received		42,100
Cash received from customers		815,000
Proceeds from sales of plant assets		9,000
Dividends paid		45,000
Cash paid to suppliers and employees		624,000
Interest paid		19,000
Income taxes paid		64,000

Using this information, prepare a statement of cash flows under direct method. (List any deduction in cash and cash outflows as negative amounts.)

Answer 1

Wyoming Outfitters, Inc.,

Statement of cash flow under direct method

For the year ended 31/12/2XXX

  

Cash flows from Operating activites:   

Cash received from customers $815,000

Cash paid to supplies and employees ($624,000)

Interest paid ($19,000)

Income taxed paid ($64,000)

NET CASH PROVIDED BY OPERATING ACTIVITIES (A)    $108,000  

Cash flows from Investing activites:

Cash paid to acquire plant assets ($22,000)

Proceeds from sales of plant assets $9,000

Interest and dividends received    $42,100

Loans made to borrowers ($4,200)

Collections on loans $4,000

NET CASH PROVIDED BY INVESTING ACTIVITIES (B)   $28,900   

Cash flow from Financing activities:

Proceeds from short-term borrowing $10,000

Dividend paid ($45,000)

NET CASH PROVIDED BY FINANCING ACTIVITIES (C)   ($35,000)

Net increase in cash and cash equivalents (A+B+C) $101,900

Cash and cash equivalents at beginning of period i.e on jan 1 $35,800

Cash and cash equivalents at end of period i.e on dec 31 $137,700

Hope this is useful and thank you!!!!