Preparing a Statement of Cash Flows (Direct Method) Use the following informatio
ID: 2391877 • 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 $12,000 Cash paid to employees and suppliers 148,000 Cash received from sale of land 40,000 Cash paid to acquire treasury stock 10,000 Cash balance, beginning of 2016 16,000 Cash received as interest 6,000 Cash paid as income taxes 11,000 Cash paid to purchase equipment 89,000 Cash received from customers 194,000 Cash received from issuing bonds payable 30,000 Cash paid as dividends 16,000Explanation / 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