Question

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

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-equipment	(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	$772,290.00	$748,770.00
13	Accrued expenses payable	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 merchandise 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. Use a minus sign to indicate a decrease in cash.

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. Use a minus sign to indicate a decrease in cash.

Canace Products Inc.

Statement of Cash Flows

1	Cash flows from operating activities:
2
3
4
5
6
7
8	Cash flows from (used for) investing activities:
9
10
11
12
13
14	Cash flows from (used for) financing activities:
15
16
17
18
19	Cash at the beginning of the year
20	Cash at the end of the year

Answer 1

Cance Products Inc
For Current Years Ended December 31 2006
Particulars		Amount	Amount
Cash flow from Operating Activities:
	Cash received from customers		5,956,450.00
	Cash paid to merchandise		(2,456,070.00)
	Cash paid towards operating expenses		(3,105,270.00)
	Cash generated from operations before tax and extra ordinary items	395,110.00
	Less Income Tax		(102,160.00)
	Net cash from Operating Activities			292,950.00
Cash flow from Investing Activities:
	Purchase of equipment		(198,720.00)
	Sale of investment		176,020.00
	Purchase of land		(519,510.00)
	Net cash used in Investing Activities			(542,210.00)
Cash flow from Finacing Activities:		-
	Proceeds from issuance of share capital		24,000.00
	Payment of Dividend		(26,810.00)
	Proceeds from paid up capital		216,000.00
	Net cash from Financing Activities			213,190.00
Net decrease in cash and cash equivalent			(36,070.00)
Cash and cash equivalent at bigining of period			679,530.00
Cash and cash equivalent at the end of the period			643,460.00

Working Notes:

Investment Account
Particulars	Amount	Particulars	Amount
Balance bd	240,910.00	By cash	176,020.00
		Loss on sale of inve	64,890.00
	240,910.00		240,910.00

Equipment
Particulars	Amount	Particulars	Amount
To Balance bd	680,990.00	By cash sale 1st equpmnt
Cash (Purchase)	198,720.00	Loss on sale
Notes Payable		Accumulated depreciation 1st
		By Balance cd	879,710.00
	879,710.00		879,710.00

Accumulated depreciation
Particulars	Amount	Particulars	Amount
To Equipment sale 1st		By Balance bd	200,970.00
		Depreciation	42,780.00
To Balance cd	243,750.00
	243,750.00		243,750.00

Accrued Expenses
Particulars	Amount	Particulars	Amount
Cash	5,830.00	By Balance bd	69,800.00
To balance cd	63,970.00	Cash received
	69,800.00		69,800.00

Dividend Payable
Particulars	Amount	Particulars	Amount
To Cash BF	26,810.00	By Balance bd	7,040.00
To balance cd	8,000.00	Retained Earnings	27,770.00
	34,810.00		34,810.00

Retained Earnings
Particulars	Amount	Particulars	Amount
Dividend	27,770.00	By Balance bd	1,881,770.00
	-	Net Income	213,880.00
To balance cd	2,067,880.00
	2,095,650.00		2,095,650.00

Accounts receivable
Particulars	Amount	Particulars	Amount
To balance bd	548,320.00	Cash - collection B/F	5,956,450.00
Sales	5,974,620.00	By Balance cd	566,490.00
	6,522,940.00		6,522,940.00

Inventory
Particulars	Amount	Particulars	Amount
To balance bd	982,600.00	Cost of slaes	2,451,470.00
To Accounts Payable	23,520.00
To Cash paid	2,456,070.00	By Balance cd	1,010,720.00
	3,462,190.00		3,462,190.00

Accounts payable
Particulars	Amount	ekkarill92 Next > < Previous Related Solutions The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is shown... The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is shown as follows: 1 Dec. 31, 20Y6 Dec. 31, 20Y5 2 Assets 3 Cash $643,400.00 $679,400.00 4 Accounts receivable (net) 566,800.00 547,400.00 5 Inventories 1,011,000.00 982,800.00 6 Investments 0.00 240,000.00 7 Land 520,000.00 0.00 8 Equipment 880,000.00 680,000.00 9 Accumulated depreciation-equipment (244,400.00) (200,400.00) 10 Total assets $3,376,800.00 $2,929,200.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable $771,800.00 $748,400.00 13 Accrued expenses payable 63,400.00 70,800.00 14... The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is shown... 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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 $302,620 $283,460 Accounts receivable (net) 109,630 101,810 Inventories 309,480 301,410 Investments 0 116,780 Land 158,740 0 Equipment 341,450 266,490 Accumulated depreciation-equipment (79,940) (71,860) Total assets $1,141,980 $998,090 Liabilities and Stockholders' Equity Accounts payable $206,700 $196,620 Accrued expenses payable 20,560 25,950 Dividends payable 11,420 8,980 Common stock, $10 par 61,670 48,910 Paid-in capital: Excess of issue... 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... The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as... 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