Question
Prepare the 2010 statement of cash flows for the Benz Company, using the information below. All the information is provided; assume no other data. Prepare
Prepare the 2010 statement of cash flows for the Benz Company, using the information below. All the information is provided; assume no other data. Prepare the statement using the direct method format by entering cash flows and reconciling items into the form below. In column A, the name or description has been entered for you. In column B, enter the amount of each item using parentheses for outflows or negative amounts. In column C, enter your net cash flow amounts and other subtotals. Enter 0 if no other amount is appropriate.
Information from the Benz Company's 2010 annual report appears below. This information will be used to prepare the firm's 2010 statement of cash flows.
Income Statement for the Year Ended 12/31/10
| Sales | $400 |
| Wages expense | (125) |
| Rent expense | (100) |
| Depreciation expense | (75) |
| Net income | $100 |
Comparative Balance Sheets 12/31/10
| 2009 | 2010 | |
| Cash | $100 | $155 |
| AR | 50 | 75 |
| Prepaid rent | 70 | 50 |
| Equipment | 300 | 400 |
| Accum. Dep. | (75) | (150) |
| Total Assets | $445 | $530 |
| Wages payable | 30 | 10 |
| Capital stock | 200 | 230 |
| Retained earnings | 215 | 290 |
| Total L+OE | $445 | $530 |
| |||||||||
| A | B | C | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 1 | Benz Company Statement of Cash Flows For the Year Ended December 31, 2010 | ||||||||
| 2 | Operating Activities | ||||||||
| 3 | Collections from customers | 375 | 0 | ||||||
| 4 | Wages paid | (145) | 0 | ||||||
| 5 | Rent paid | (80) | 0 | ||||||
| 6 | Net cash flows from operations | 0 | 150 | ||||||
| 7 | Investing Activities | ||||||||
| 8 | Purchase equipment | (100) | 0 | ||||||
| 9 | Net cash flows from investing | 0 | (100) | ||||||
| 10 | Financing Activities | ||||||||
| 11 | Issue capital stock | 30 | 0 | ||||||
| 12 | Dividends paid | (25) | 0 | ||||||
| 13 | Net cash flows from financing | 0 | 5 | ||||||
| 14 | Increase in cash, 2010 | 0 | 55 | ||||||
| 15 | Cash, 1/1/10 | 0 | 100 | ||||||
| 16 | Cash, 12/31/10 | 0 | 155 | ||||||
| 17 | Reconciliation of Net income and Net Flow from Operations | ||||||||
| 18 | Net income | 100 | 0 | ||||||
| 19 | Accounts receivable increase | (25) | 0 | ||||||
| 20 | Wages payable decrease | (20) | 0 | ||||||
| 21 | Prepaid rent decrease | 20 | 0 | ||||||
| 22 | Depreciation expense | 75 | 0 | ||||||
| 23 | Net cash flows from operations | 0 | 150 | ||||||
The above are all correct answers. However, I was confused how to get them. Could you please show me the step of the solutions?
Thank you for the help.
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Data Analytics For Accounting
Authors: Vernon Richardson
3rd Edition
1264444907, 9781264444908
