Satu Company, a merchandiser, recently completed its 2016 operations. For the year, (1) All sales are credit

Question:

Satu Company, a merchandiser, recently completed its 2016 operations. For the year,

(1) All sales are credit sales,

(2) All credits to Accounts Receivable reflect cash receipts from customers,

(3) All purchases of inventory are on credit,

(4) All debits to Accounts Payable reflect cash payments for inventory,

(5) Other Expenses are cash expenses, and

(6) Any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company's income statement and balance sheets follow.

SATU COMPANY

Comparative Balance Sheets

December 31, 2016 and 2015

Satu Company, a merchandiser, recently completed its 2016 operations. For

SATU COMPANY
Income Statement
For Year Ended December 31, 2016
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $750,800
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . 269,200
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481,600
Operating expenses
Depreciation expense . . . . . . . . . $ 15,700
Other expenses . . . . . . . . . . . . . . 173,933 . . . 189,633
Income before taxes . . . . . . . . . . . . . . . . . . . . . 291,967
Income taxes expense . . . . . . . . . . . . . . . . . . . . 89,200
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $202,767
Additional Information on Year 2016 Transactions
a. Purchased equipment for $30,250 cash.
b. Issued 3,000 shares of common stock for $21 cash per share.
c. Declared and paid $60,000 of cash dividends.
Required
Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...