Question

20172016 Income Statement for 201 Cash Accounts Receivable Inventory Long-term investment Building and Equipment Accumulated Depreciation Land 380,000 (120,000)) (55,000) (40,000) (12,000) (3,000) 70,000 S 80,000 S 42 $ 31.000 Sales Revenue 73,000 75,000 40,000 550,000 (115.000) 50,000 75.000 Cost of Goods Sold 70,00011 Salaries Expense 15000 Depreciation Expense 400,000 Interest Expense (75,000)!! Loss on Sale of Land 59,000 Income Tax Expense Total Assets Net Income S 715,000 $ 575,000 Liabilities and Stockholder's Equity Accounts Payable Salaries Payable Interest Payable Income Tax Payable Notes Payable Bonds Payable $ 28,000 35,000 2,000 5,000 9,000 5,000 3,000 12,000 30,000 160,000100000 Total Liabilities S 204.000 185,000 Stockholder's Equity Common Stock, $1 par 255,000 200,000 Paid-in Capital Excess of par Retained Eamings 161,000 95,000 100,000 90.000 Total Stockholder's Equity Total Liabilities and Stockholder's Equity S 511,000 390,000 S 715,000 575,000

Additional information from accounting records:

a.       Land that originally cost $9,000 was sold for $6,000

b.      The common stock of news corp was purchased for $35,000 as a long-term investment

c.       New equipment was purchased for $150,000 cash

d.      A $30,000 note was paid at maturity on January 1

e.      On January 1, 2018, $60,000 of bonds were sold at face value

f.        Common stock ($50,000 par) was sold for $76,000

g.       In may, Jamaica Inc issued a 5% stock dividend (5,000 shares). The market price of $1 par value common stock was $8 per share at that time

h.      Net income was $80,000 and cash dividends of $35,000 were paid to shareholders

Cash paid to suppliers?

$118,00

$132,000

$122,000

$142,000

Net cash Investing?

($181,000)

($168,000)

($144,000)

($169,000)

Net Cash Financing?

$31,000

$101,000

$71,000

$106,000

Net Cash Operating Activities?

Answer 1

Cash Flow statement-Direct Method					Working Note
For the Year Ended December 31, 2017				1	Cash received from customers:
Cash flows from operating activities	$(in 000)	$(in 000)			Opening Accounts recevable	75000
Cash received from customers 1		$ 382,000			Add: sales	380000
Cash paid to suppliers 2		(132,000)				455000
Cash paid for operating expenses 3		(141,000)			Less: Ending Accounts Receivable	-73000
Net cash provided (used) by operating activities		$ 109,000			Cash received from customers	382000
Cash flows from investinq activities
Sale of land	6,000			2	Cash paid to suppliers:
Sale of investment	10,000		(15000+35000-40000)		Opening Accounts payable	35000
Purchase of investment	(35,000)				Add: cost of goods sold	120000
Purchase of equipment	(150,000)		Given		Add: increase in inventory	5000
Net cash provided (used) by investing activities		(169,000)				160000
Cash flows from financing activities					Less: Ending Accounts Payable	-28000
Redemption of note	(30,000)				Cash paid to suppliers	132000
Issue of bonds	60,000
Issue of common stock	76,000		Given	3	Cash paid for operating expenses:
dividend paid	(35,000)		Given		Opening accrued expenses payable	20000	(5000+3000+12000)
Net cash provided (used) by financing activities		71,000			Add: operating expenses	137000	(55000+12000+70000)
Net increase (decrease) in cash		$   11,000				157000
Cash at beqinning of year		31,000			Less: Ending accrued expenses payable	-16000
Cash at end of year		$   42,000			Cash paid for operating expenses	141000
Cash paid to suppliers?	$          132,000	Ans B
Net cash Investing?	$       (169,000)	Ans D
Net Cash Financing?	$            71,000	Ans C
Net Cash Operating Activities?	$          109,000