Question

In: Accounting

Prepare the cash flows from operating activities section of HHC's statement of cash flows using the direct method.

The following are summary cash transactions that occurred during the year for Hilliard Healthcare Co. (HHC):

Cash Received from:

Customers ........................................................$660,000

Interest on note receivables ..........................12,000

Collection of note receivable.......................100,000

Sale of land ..........................................................40,000

Insurance of common stock..........................200,000

 

Cash paid for:

Interest on note payable .................................18,000

Purchase of equipment .................................120,000

Operating expenses .......................................440,000

Dividends to shareholders .............................30,000

 

Prepare the cash flows from the operating activities section of HHC's statement of cash flows using the direct method.

Solutions

Expert Solution

Cash Flows from Operating Activities:  
Collections from customers $ 660,000
Interest on note receivable       12,000
Interest on note payable      (18,000)
Payment of operating expenses       (440,000)
Net cash flows from operating activities  $214,000

 

Only these four cash flow transactions relate to operating activities. The others are investing and financing activities.


Net cash flows from operating activities: $214,000

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