Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31,...

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Statement of Cash Flows-Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, i

eBook Show Me How Calculator Total liabilities and stockholders equity $1,048,750 $909,270 The income statement for the year

Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use

Cash used for purchase of land Cash used for purchase of equipment Net cash flow used for investing activities Cash flows fro

business accounting

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Answer 1

Answer #1

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Canace Product Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y6
Cash flows from operating activities:
Cash received from customers	$1599240
Cash payments for merchandise	-$660710
Cash payments for operating expenses	-$839320
Cash payments for income taxes	-$23730
Net cash flow from operating activities		$75480

Cash flows from (used for) investing activities:
Cash from sale of investments	$77660
Cash used for purchase of land	-$145780
Cash used for purchase of equipment	-$70800
Net cash flow used for investing activities		-$138920

Cash flows from (used for) financing activities:
Cash from sale of common stock	$101320
Cash used for dividends	-$18190
Net cash flow from financing activities		$83130

Increase in cash		$19690
Cash at the beginning of the year		$258230
Cash at the ending of the year		$277920

Calculation:

1. Cash received from customers:

= Sales - (Ending accounts receivable - Beginning accounts receivable)

= $1607170 - ($100680 - $92750)

= $1599240

2. Cash payments for merchandise

= Cost of merchandise sold + (Ending inventories - Beginning inventories) - (Ending accounts payable - Beginning accounts payable)

= $661800 + ($284210 - $274600) - ($189830 - $179130)

= $660710

3. Cash payment for operating expenses:

= Operating expenses other than depreciation + (Beginning accrued expenses payable - Ending accrued expenses payable)

= $834560 + ($23640 - $18880)

= $839320

4. Cash used for purchase of land:

= Ending balance of land - Beginning balance of land

= $145780 - $0

= $145780

5. Cash used for purchase of equipment:

= Ending balance of equipment - Beginning balance of equipment

= $313580 - $242780

= $70800

6. Cash from sale of common stock:

= (Ending balance of common stock + Paid-in capital) - (Beginning balance of common stock + Paid-in capital)

= ($56630 + $212900) - ($44550 + $123660)

= $101320

7. Cash used for dividends:

= Dividends paid - (Ending dividends payable - Beginning dividends payable)

= $20500 - ($10490 - $8180)

= $18190

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Answer 2

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