Question

P14A-19B 6 Preparing the statement of cash flows-direct method [45-60 min] To prepare the statement of cash flows, accountants for I-M-Mobile, Inc., have sum marized 2012 acvity in the Cash account as follows: Cash Beginning balance Issuance of common stock Receipts of interest revenue Collections from customers 87,900 Payments of operating expenses 46,200 64,500 78,000 8,000 Payments on accounts payable 101,200 1,200 21,400 56,500 60,700 Payment 15,600 Payment of note payable 308,700 Payment of income tax s of salaries and wages Payments of dividends Payments of interest Purchase of equipment Ending balance 95,900 Requirement 1 Prepare I-M-Mobiles statement of cash flows for the year ended December 31 2012, using the direct method to report operating activities

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STATEMENT OF CASH FLOWS (DIRECT METHOD)
Cash flows from operating activities:
Collection from customers 308700
Receipts of interest income 15600
Payments on accounts payable -101200
Payments of operating expenses -46200
Payments of salaries and wages -64500
Payment of income tax -8000
Payment of interest -21400
Net cash from operating activities 83000
Cash flows from investing activities:
Purchase of equipment -56500
Net cash used by investing activities -56500
Cash flows from financing activities:
Issuance of common stock 60700
Payment of note payable -78000
Payment of dividends -1200
Net cash from financing activities -18500
Increase in caah and cash equivalents 8000
Beginning balance of cash and cash equivalents 87900
Ending balance of cash and cash equivalents 95900
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