Question

In: Accounting

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

The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows: use labels and amounts descriptions provided at the bottom

1

Dec. 31, 20Y6

Dec. 31, 20Y5

2

Assets

3

Cash

$643,460.00

$679,530.00

4

Accounts receivable (net)

566,490.00

548,320.00

5

Inventories

1,010,720.00

982,600.00

6

Investments

0.00

240,910.00

7

Land

519,510.00

0.00

8

Equipment

879,710.00

680,990.00

9

Accumulated depreciation

(243,750.00)

(200,970.00)

10

Total assets

$3,376,140.00

$2,931,380.00

11

Liabilities and Stockholders’ Equity

12

Accounts payable (merchandise creditors)

$772,290.00

$748,770.00

13

Accrued expenses payable (operating expenses)

63,970.00

69,800.00

14

Dividends payable

8,000.00

7,040.00

15

Common stock, $2 par

56,000.00

32,000.00

16

Paid-in capital: Excess of issue price over par—common stock

408,000.00

192,000.00

17

Retained earnings

2,067,880.00

1,881,770.00

18

Total liabilities and stockholders’ equity

$3,376,140.00

$2,931,380.00

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

1

Sales

$5,974,620.00

2

Cost of goods sold

2,451,470.00

3

Gross profit

$3,523,150.00

4

Operating expenses:

5

Depreciation expense

$42,780.00

6

Other operating expenses

3,099,440.00

7

Total operating expenses

3,142,220.00

8

Operating income

$380,930.00

9

Other expense:

10

Loss on sale of investments

(64,890.00)

11

Income before income tax

$316,040.00

12

Income tax expense

102,160.00

13

Net income

$213,880.00

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

a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $176,020 cash
d. The common stock was issued for cash.
e. There was a $27,770 debit to Retained Earnings for cash dividends declared.

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.

X

Statement of Cash Flows

Shaded cells have feedback.

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.

Score: 10/131

Canace Products Inc.

Statement of Cash Flows

1

Cash flows from operating activities:

2

3

4

5

6

7

8

Cash flows from investing activities:

9

10

11

12

13

14

Cash flows from financing activities:

15

16

17

18

19

Cash at the beginning of the year

20

Cash at the end of the year

Labels and Amount Descriptions

Cash paid for dividends
Cash paid for purchase of equipment
Cash paid for purchase of land
Cash paid for purchase of treasury stock
Cash payments for income taxes
Cash payments for merchandise
Cash payments for operating expenses
Cash received from customers
Cash received from sale of common stock
Cash received from sale of investments
Change in cash
December 31, 20Y6
Depreciation
For the Year Ended December 31, 20Y6
Gain on sale of investments
Issuance of common stock for acquisition of land
Issuance of common stock for purchase of equipment
Loss on sale of investments
Net cash flow from financing activities
Net cash flow from investing activities
Net cash flow from operating activities
Net cash flow used for financing activities
Net cash flow used for investing activities
Net cash flow used for operating activities

Points:

2.21 / 29

Solutions

Expert Solution

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Canace Products Inc. Amount $   Answer a
Cash Received from sale Cash Flow Direct Method Amount $   Amount $  
Opening Accounts Receivable       548,320.00 Cash Receipts from
Add: Sales    5,974,620.00 Cash Received from sale 5,956,450.00 See A
Less: Closing Accounts Receivable       566,490.00 Total cash inflows 5,956,450.00
Cash Received from sale 5,956,450.00 A Cash paid for Inventory purchased 2,456,070.00 See C
Cash paid for Operating Expense 3,105,270.00 See D
Inventory purchased Income Tax paid      102,160.00
Cost of goods sold    2,451,470.00 Total cash outflows 5,663,500.00
Add: Closing Inventory    1,010,720.00 Net Cash inflow from operating activities       292,950.00 J
Less: Opening Inventory       982,600.00
Inventory purchased 2,479,590.00 B Cash Flow from Investing Activities
Equipment purchased    (198,720.00) See E
Cash paid for Inventory purchased Land purchased    (519,510.00) See F
Opening Accounts Payable       748,770.00 Investments sold      176,020.00
Add: Purchases    2,479,590.00 See B Net Cash outflow from Investing Activities     (542,210.00) K
Less: Closing Accounts Payable       772,290.00
Cash paid for Inventory purchased 2,456,070.00 C Cash Flow from Financing Activities See I
Share capital issued      240,000.00 See G
Cash paid for Other operating expenses Payment of dividends       (26,810.00) See H
Other operating expenses    3,099,440.00 Net Cash inflow form Financing Activities       213,190.00 L
Add: Accrued expenses payable- opening         69,800.00
Less: Accrued expenses payable- closing         63,970.00 Net Increase in cash        (36,070.00) M=J+K+L
Cash paid for Other operating expenses 3,105,270.00 D Add: Beginning Cash Balance       679,530.00 N
Ending cash Balance       643,460.00 O=M+N
Equipment purchased
Closing value       879,710.00
Less: Opening value       680,990.00
Equipment purchased       198,720.00 E
Land purchased
Closing value       519,510.00
Less: Opening value                        -  
Land purchased       519,510.00 F
Share capital issued
Closing balance- Common stock         56,000.00
Closing balance- Paid-in capital: Excess of issue price over par—common stock       408,000.00
Less: Opening balance- Common stock         32,000.00
Less: Opening balance- Paid-in capital: Excess of issue price over par—common stock       192,000.00
Share capital issued       240,000.00 G
Dividend paid
Dividend expense for the year         27,770.00
Add: Dividend payable- opening            7,040.00
Less: Dividend payable- closing            8,000.00
Dividend paid         26,810.00 H

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