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Statement of Cash Flows

Zowine Company's condensed income statement for the year ended December 31, 20-2, is shown.

Net sales	$762,000
Cost of goods sold	553,000
Gross profit	$209,000
Operating expenses	33,000
Income before taxes	$176,000
Income tax expense	52,800
Net income	$123,200

Additional information obtained from Zowine's comparative balance sheets as of December 31, 20-2 and 20-1, is shown.

	20-2		20-1
Cash		$75,200		$21,000
Accounts receivable		71,000		101,000
Merchandise inventory		79,000		121,000
Accounts payable		48,000		81,000

The following additional information was obtained from Zowine's financial statements and auxiliary records for the year ended December 31, 20-2 is shown.

Acquired a new warehouse	$117,000
Bought new warehouse equipment	80,000
Issued a note to the bank	42,000
Issued additional common stock:
Par value	52,000
Paid-in capital in excess of par	23,000
Declared and paid cash dividends	28,000

Required:

Prepare a statement of cash flows for Zowine for the year ended December 31, 20-2

162,200 Prepare a statement of cash flows for Zowine for the year ended December 31, 20-2. Zowine Company Statement of Cash Flows For Year Ended December 31, 20-2 Cash flows from operating activities: Net income 123,200 Adjustments for changes in current assets and liabilities related to operating activities: Decrease in accounts receivable 30,000 Decrease in merchandise inventory 42,000 Decrease in accounts payable 33,000 x Net cash provided by operating activities Cash flows from investing activities: Purchased warehouse 117,000 x Purchased warehouse equipment 80,000 x Total cash used by investing activities 197,000 Cash flows from financing activities: Issued note payable Issued common stock 75,000 Paid cash dividends 28,000 X Net cash provided by financing activities 89,000 Net increase in cash X 42,000 54,200 Cash, January 1, 20-2 21,000 Cash, December 31, 20-2 75,200 Feedback