Preparing a Statement of Cash Flows (Direct Method) Use the following informatio
ID: 2391793 • Letter: P
Question
Preparing a Statement of Cash Flows (Direct Method) Use the following information about the 2016 cash flows of Mason Corporation to prepare a statement of cash flows under the direct method. Refer to Exhibit 4.3 for the appropriate format Cash balance, end of 2016 Cash paid to employees and suppliers 148,000 Cash received from sale of land Cash paid to acquire treasury stock Cash balance, beginning of 2016 Cash received as interest Cash paid as income taxes Cash paid to purchase equipment Cash received from customers Cash recelved from issuing bonds payable 30,000 Cash paid as dividends $12000 40,000 10,000 16,000 6,000 11,000 89,000 194,000 16,000 MASON CORPORATION STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2016 Cash flows from operating activities Cash received from customers Cash received as interest Cash paid as income taxes Net cash provided by operating activities Cash flows from investing activities 0 Purchase of equipment Net cash used by investing actvitles Cash flows from finanding activities Issuance of bonds payable Acquisition of treasury stock Net cash provided by financing activities 0 Net decrease in cash Cash at end of year 5 0Explanation / Answer
Cash flow from direct method :
Cash flow from operating activities Cash received from customers 194000 Cash received as interest 6000 Cash paid to employees -148000 Cash paid as income tax -11000 Net cash provided by operating activities 41000 Cash flow from investing activities Sale of land 40000 Purchase of equipment -89000 Net cash used by investing activities -49000 Cash flow from financing activities Issuance of bonds payable 30000 Acquisition of treasury stock -10000 Dividend paid -16000 Net cash provided by financing activities 4000 Net decrease in cash -4000 Cash at beginning of year 16000 Cash at end of year 12000