Question

Digha Corporation uses the direct method to prepare its statement of cash flows. Data related to cash activities for last year appear next. (Click the icon to view the data.) nswer the following questions: . Calculate the net cash flow from operating activities for the year. (Use parentheses or a minus sign for numbers to be subtracted or net cash outf Operating Activities: Net cash provided by (used for) operating activities i Data Table Paid for equipment Paid to suppliers..... $ Paid for insurance ............. $ Depreciation expense ..............$ Paid for advertising .............$ Received from sale of land .........$ Received from sale of plant assets....$ 18,000 Paid for interest .. 35,000 Paid for utilities... $ 9,500 Paid dividends... 3,000 Received from customers ... $ 7,600 Paid for taxes............ $ 13,000 Received from issuing long-term note payable ...$ 6,800 Paid to employees.. ...........$ 4.400 15,000 7,300 51,000 5,600 28,000 15,000

Answer 1

Cash flow statement record changes in cash during the period of time. It is bifurcated into three parts (1) cash flow from operating activities (2) cash flow from investing activities (3) cash flow from financing activities.

Cash flow from operating activities records changes in cash due to normal business operations like suppliers payment, customer receipt , interest payments etc.

Paid for equipment - cash flow from investing activities a equipment is an investment for the firm

Paid to suppliers - operating activities

Paid for insurance- operating activities

depreciation - non cash expense does not affect cash flow statement direct method

paid for advertising - operating activities

received from sale of land - investing activities

received from sale of plant assets - investing activities

paid for interest- operating activities

paid for utilities- operating activities

paid dividend - financing activities

received from customers - operating activites

paid for taxes - operating activities

long term note payable - financing activities as funds received against long term liability

paid to employees- operating activities

ANSWER:-

Paid to suppliers	($35,000)
Paid for insurance	($9,500)
Paid for advertising	($7,600)
Paid for interest	($4,400)
Paid for utilities	($15,000)
Received from customers	$51,000
paid for taxes	($5,600)
Paid to employees	($15,000)
Net cash provided (used for)operating activities [-35000-9500-7600-4400-15000+51000-5600-15000]	($41,100)