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

20–25 min.

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

Cash Beginning balance Receipts of interest Collections from customers Issuance of common stock Ending balance 63,800 8,200 461,300 58,500 91,200 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 276,900 10,700 62,300 21,400 21,800 27,900 72,000 7,600 Requirement 1. Prepare the statement of cash flows of Nelson Industrial, Inc., for the year ended December 31, 2014, using the direct method for operating activities.

AppendixLO1