Question
Prepare a statement of Cash Flows... USE DIRECT METHOD The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, is shown
Prepare a statement of Cash Flows... USE DIRECT METHOD
The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, is shown as follows:
1 |
| Dec. 31, 2016 | Dec. 31, 2015 |
2 | Assets |
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3 | Cash | $643,460.00 | $679,530.00 |
4 | Accounts receivable (net) | 566,490.00 | 548,320.00 |
5 | Inventories | 1,010,720.00 | 982,600.00 |
6 | Investments | 0.00 | 240,910.00 |
7 | Land | 519,510.00 | 0.00 |
8 | Equipment | 879,710.00 | 680,990.00 |
9 | Accumulated depreciation-equipment | (243,750.00) | (200,970.00) |
10 | Total assets | $3,376,140.00 | $2,931,380.00 |
11 | Liabilities and Stockholders Equity |
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12 | Accounts payable (merchandise creditors) | $772,290.00 | $748,770.00 |
13 | Accrued expenses payable (operating expenses) | 63,970.00 | 69,800.00 |
14 | Dividends payable | 8,000.00 | 7,040.00 |
15 | Common stock, $2 par | 56,000.00 | 32,000.00 |
16 | Paid-in capital: Excess of issue price over parcommon stock | 408,000.00 | 192,000.00 |
17 | Retained earnings | 2,067,880.00 | 1,881,770.00 |
18 | Total liabilities and stockholders equity | $3,376,140.00 | $2,931,380.00 |
The income statement for the year ended December 31, 2016, is as follows:
1 | Sales |
| $5,974,620.00 |
2 | Cost of merchandise sold |
| 2,451,470.00 |
3 | Gross profit |
| $3,523,150.00 |
4 | Operating expenses: |
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5 | Depreciation expense | $42,780.00 |
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6 | Other operating expenses | 3,099,440.00 |
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7 | Total operating expenses |
| 3,142,220.00 |
8 | Operating income |
| $380,930.00 |
9 | Other expense: |
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10 | Loss on sale of investments |
| (64,890.00) |
11 | Income before income tax |
| $316,040.00 |
12 | Income tax expense |
| 102,160.00 |
13 | Net income |
| $213,880.00 |
Additional data obtained from an examination of the accounts in the ledger for 2016 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 $176,020 cash |
D. | The common stock was issued for cash. |
E. | There was a $27,770 debit to Retained Earnings for cash dividends declared. |
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Labels and Amount Descriptions | |
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Cash paid for dividends | |
Cash paid for purchase of equipment | |
Cash paid for purchase of land | |
Cash paid for purchase of treasury stock | |
Cash payments for income taxes | |
Cash payments for merchandise | |
Cash payments for operating expenses | |
Cash received from customers | |
Cash received from sale of common stock | |
Cash received from sale of investments | |
December 31, 2016 | |
Decrease in cash | |
Depreciation | |
For the Year Ended December 31, 2016 | |
Gain on sale of investments | |
Increase in cash | |
Issuance of common stock for acquisition of land | |
Issuance of common stock for purchase of equipment | |
Loss on sale of investments | |
Net cash flow from financing activities | |
Net cash flow from investing activities | |
Net cash flow from operating activities | |
Net cash flow used for financing activities | |
Net cash flow used for investing activities | |
Net cash flow used for operating activities |
Canace Products Inc. |
Statement of Cash Flows |
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1 | Cash flows from operating activities: |
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8 | Cash flows from investing activities: |
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14 | Cash flows from financing activities: |
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19 | Cash at the beginning of the year |
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20 | Cash at the end of the year |
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