Question

Condensed financial data of Shamrock, Inc. follow.

Shamrock, Inc. Comparative Balance Sheets December 31
Assets		2022			2021
Cash		$ 161,600			$ 96,800
Accounts receivable		175,600			76,000
Inventory		225,000			205,700
Prepaid expenses		56,800			52,000
Long-term investments		276,000			218,000
Plant assets		570,000			485,000
Accumulated depreciation		(100,000	)		(104,000	)
Total		$1,365,000			$1,029,500
Liabilities and Stockholders’ Equity
Accounts payable		$ 204,000			$ 134,600
Accrued expenses payable		33,000			42,000
Bonds payable		220,000			292,000
Common stock		440,000			350,000
Retained earnings		468,000			210,900
Total		$1,365,000			$1,029,500

Shamrock, Inc. Income Statement Data For the Year Ended December 31, 2022
Sales revenue				$776,920
Less:
Cost of goods sold		$270,920
Operating expenses, excluding depreciation		24,820
Depreciation expense		93,000
Income tax expense		54,560
Interest expense		9,460
Loss on disposal of plant assets		15,000		467,760
Net income				$ 309,160

Additional information:

1.		New plant assets costing $200,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $115,000 and accumulated depreciation of $97,000 were sold for $3,000 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $52,060 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors.
Prepare a statement of cash flows for Shamrock, Inc. using the direct method.

Answer 1

Shamrock, Inc.
Cash Flow Statement
For the Year Ended December 31, 2022
Cash flow from operating activities
Cash received from customers	$   6,77,320		776920+76000-175600
Cash paid to suppliers	$ -2,20,820		270920+134600-204000+225000-205700
Cash paid for operating expenses	$     -38,620		24820+42000-33000+56800-52000
Cash paid for interest expense	$       -9,460
Cash paid for income tax	$     -54,560
Net cash provided by operating activities		$   3,53,860
Cash flow from Investing activities
Cash paid for purchase of plant assets	$ -2,00,000
Cash received from sale of plant assets	$         3,000
Cash paid for purchase of long term investment	$     -58,000
Net cash used by investing activities		$ -2,55,000
Cash flow from financing activities
Cash paid for bonds at maturity	$     -72,000
Cash received from issuance of common stock	$      90,000
Dividends paid	$     -52,060
Net cash used by financing activities		$     -34,060
Increase in cash		$      64,800
Cash at beginning		$      96,800
Cash at end		$   1,61,600

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