Determining Selected Amounts for Cash Flows from Operating ActivitiesDirect Method Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: Balance, December 31 Balance, January 1 Accrued expenses payable operating expenses) $6,590 $7,200 Accounts payable (merchandise creditors) 37,290 41,160 Inventories 70,250 76,360 During the current year, the cost of merchandise sold was $384,200, and the operating expenses other than depreciation were $89,800. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. a. Determine the amount reported on the statement of cash flows for cash payments for merchandise. b. Determine the amount reported on the statement of cash flows for cash payments for operating expenses. Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 2046 and 20Y5, is as follows: Dec. 31, 2016 Dec. 31, 2045 Assets Cash $291,000 $272,260 Accounts receivable (net) 105,420 97,780 Inventories 297,590 289,510 Investments 0 112,160 Land 152,640 0 Equipment 328,330 255,960 Accumulated depreciation equipment (76,870) (69,020) Total assets $1,098,110 $958,650 $198,760 $188,850 24,920 19,770 10,980 8,630 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par Paid-in capital: Excess of issue price over par-common stock Retained earnings Total liabilities and stockholders' equity 59,300 46,970 222,920 130,380 586,380 558,900 $1,098,110 $958,650 The income statement for the year ended December 31, 2016, is as follows: Sales $1,600,660 Cost of merchandise sold 659,100 $941,560 Gross profit Operating expenses: Depreciation expense Other operating expenses $7,850 831,250 839,100 Total operating expenses Operating income $102,460 Other expense: Loss on sale of investments (30,280) Income before income tax $72,180 Income tax expense 23,100 Net income $49,080 Additional data obtained from an examination of the accounts in the ledger for 2046 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 $81,880 cash. d. The common stock was issued for cash. e. There was a $21,600 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. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Canace Products Inc. Statement of Cash Flows For the Year Ended December 31, 2016 Cash flows from operating activities: Net cash flow from operating activities Cash flows from (used for) investing activities: Net cash flow used for investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities Cash at the beginning of the year Cash at the end of the year
