Question

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Statement of cash flows-direct method applied to PR 13-1A Instructions Labels and Amount Descriptions Statement of Cash Flows Instructions Dec. 31, 2043 Dec. 31,2072 Assets Cash $155,000.00 $150,000.00 Accounts receivable (net) 450,000.00 400,000.00 Inventories 770,000.00 750,000.00 100,000.00 Investments 0.00 7 Land 500,000.00 0.00 8 Equipment 1,400,000.00 9 Accumulated depreciation equipment (600,000.00) $2,675,000.00 1,200,000.00 (500,000.00) $2,100,000.00 10 Total assets Liabilities and Stockholders' Equity 12 Accounts payable (merchandise creditors) $340,000.00 $300,000.00 Accrued expenses payable (operating expenses) 50,000.00 45,000.00 30,000.00 14 Dividends payable 25,000.00 15 Common stock, $4 par 700,000.00 Paid-in capital in excess of par-common stock 200,000.00 600,000.00 175,000.00 950,000.00 $2,100,000.00 17 Retained earnings 1,360,000.00 $2,675,000.00 18 Total Liabilities and stockholders' equity

Answer 1

$ 490,000 Livers Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 4 Cash flows from (used for) operating activities: 5 Cash received from customers $ 2,950,000 6 Cash payments for merchandise $ -1,380,000 7 Cash payments for operating expenses $ -955,000 8 Cash payments for income taxes $ 125,000 9 Net cash flow from operating activities 10 11 Cash flows (used for) from investing activities: 12 Cash received from sale of investments $ 175,000 13 Cash paid for purchase of land $ 500,000 14 Cash paid for purchase of equipment $ 200,000 15 Net cash flow used for investing activities 16 17 Cash flows (used for) from financing activities: 18 Cash received from sale of common stock $ 125,000 19 Cash paid for dividends $ -85,000 20 Net cash flow from financing activities 21 Net increase in cash 22 Cash balance, January 1, 20Y3 23 Cash balance, December 1, 2013 $ -525,000 $ 40,000 $ 5,000 $ 150,000 $ 155,000

=+B5+B6+B8+B7 Livers Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 4 Cash flows from (used for) operating activities: 5 Cash received from customers 2950000 6 Cash payments for merchandise - 1380000 7 Cash payments for operating expenses -955000 8 Cash payments for income taxes - 125000 9 Net cash flow from operating activities 10 11 Cash flows (used for) from investing activities: 12 Cash received from sale of investments 175000 13 Cash paid for purchase of land -500000 14 Cash paid for purchase of equipment =1200000-1400000 15 Net cash flow used for investing activities 16 17 Cash flows (used for) from financing activities: 18 Cash received from sale of common stock 125000 19 Cash paid for dividends -85000 20 Net cash flow from financing activities 21 Net increase in cash 22 Cash balance, January 1, 2013 23 Cash balance, December 1, 20Y3 =+B12+B13+B14 =+B18+B19 =+C9+C15+C20 150000 =+C21+C22

Note: Sales Add: Beginning accounts receivabels Less: Ending accounts receivabels Cash received from customers $ 3,000,000 $ 400,000 $ 450,000 $ 2,950,000 Cost of goods sold Add: Ending inventory Less: Beginning inventory Purchases made during the year Add: Beginning accounts payable Less: Ending accounts payable Cash payments for merchandise $ 1,400,000 $ 770,000 $ -750,000 $ 1,420,000 $ 300,000 $ 340,000 $ 1,380,000 Other Operating expense Add: Beginning accrued expense payable Less: Ending accrued expense payable Cash payments for operating expenses $ $ $ $ 950,000 50,000 -45,000 955,000 Ending balance of common stock Ending balance of paid in capital in excess of par Beginning balance of common stock Beginning balance of paid in capital in excess of par Cash received from sale of common stock $ $ $ $ $ 700,000 200,000 -600,000 -175,000 125,000

Beginning dividends payable Add: Dividends declared Less: Ending dividends payable Cash paid for dividends $ $ $ $ 25,000 90,000 -30,000 85,000