Prepare statement of cash flows—direct method (Learning Objective 4)

20–25 min.

The accounting records for T. Houton Associates, Inc., for the year ended April 30, 2014, contain the following information:

a. Purchase of fixed assets for cash, $49,000

b. Proceeds from issuance of common stock, $45,000

c. Payment of dividends, $44,400

d. Collection of interest, $7,500

e. Payment of salaries, $95,000

f. Proceeds from sale of fixed assets, $27,000 g. Collections from customers, $609,000 h. Cash receipt of dividend revenue, $5,500 i. Payments to suppliers, $368,500 j. Depreciation expense, $59,000 k. Proceeds from issuance of long-term notes, $39,100 l. Payments of long-term notes payable, $49,000 m. Interest expense and payments, $13,500 n. Income tax expense and payments, $43,000 o. Cash balances: April 30, 2013, $40,100; April 30, 2014, $110,800 Requirement 1. Prepare T. Houton Associates’ statement of cash flows for the year ended April 30, 2014. Use the direct method for cash flows from operating activities.

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