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

20–25 min.

To prepare the statement of cash flows, accountants for C. Harrison, Inc., summarized 2014 activity in the Cash account as:

Cash Beginning balance Receipts of interest Collections from customers Issuance of common stock Ending balance 100,400 23,300 492,300 90,000 81,900 Payment on accounts payable Payment of dividends Payment of salaries and wages Payment of interest Payment for equipment Payment of operating expenses Payment of notes payable Payment of income tax 300,000 22,000 143,800 21,600 9,900 31,000 79,000 16,800 Requirement 1. Prepare the statement of cash flows of C. Harrison, Inc., for the year ended December 31, 2014, using the direct method for operating activities.

AppendixLO1