Memphis Corp., a merchandiser, recently completed its 2009 operations. For the y

Question

Memphis Corp., a merchandiser, recently completed its 2009 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company's balance sheets, income statement and additional information are attached as an image below. The original problem is also attached as an image below.


Required:
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Negative amounts should be indicated by a minus sign.)

MEMPHIS CORPORATION
Statement of Cash Flows
For Year Ended December 31, 2009

Cash flows from operating activities
Net income $?
Adjustments to reconcile net income to net
cash provided by operating activities
Accounts receivable increase $?
Inventory increase $?
Accounts payable increase $?
Taxes payable increase $?
Depreciation Expense $?
Net cash provided by operating activities $?
Cash flows from investing activities
Cash paid for Equipment $?
Cash flows from financing activities
Click to Select (choices are a-cash received from issuing stock, b-cash paid for equipment, c- depreciation expenses, d- cash paid for cash dividends, e- income before taxes) $?
Click to Select (choices are a-cash received from issuing stock, b-cash paid for equipment, c- depreciation expenses, d- cash paid for cash dividends, e- income before taxes) $?
Net cash used in financing activities $?
Net increase in cash $?
Cash balance at December 31, 2008 $?
Cash balance at December 31, 2009 $?

Memphis Corp., a merchandiser, recently completed its 2009 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company's balance sheets, income statement and additional information are attached as an image below. The original problem is also attached as an image below. Required: Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Negative amounts should be indicated by a minus sign.) MEMPHIS CORPORATION Statement of Cash Flows For Year Ended December 31, 2009 Cash flows from operating activities Net income $? Adjustments to reconcile net income to net cash provided by operating activities Accounts receivable increase $? Inventory increase $? Accounts payable increase $? Taxes payable increase $? Depreciation Expense $? Net cash provided by operating activities $? Cash flows from investing activities Cash paid for Equipment $? Cash flows from financing activities Click to Select (choices are a-cash received from issuing stock, b-cash paid for equipment, c- depreciation expenses, d- cash paid for cash dividends, e- income before taxes) $? Click to Select (choices are a-cash received from issuing stock, b-cash paid for equipment, c- depreciation expenses, d- cash paid for cash dividends, e- income before taxes) $? Net cash used in financing activities $? Net increase in cash $? Cash balance at December 31, 2008 $? Cash balance at December 31, 2009 $? Required: Prepare a complete statement of cash floes: report its cash nnows and cash outflows from operating activities acconbrg to the ondarect method. (Negative amounts should be indicated by a minus sign. Omit the ^''S^'' sign in your response.)

Explanation / Answer

cash flow from operating activities net income 127000 adjustments to reconcile accounts receivable (8000) inventory (95000) accounts payable 64000 taxes payable 3000 depreciation expense 57000 net cash from operating activities 148000 cash flows from investing activities cash for equipment (105000) cash flows from financing activities issuance of common stock 70000 dividends on stock (85000) net cash in financing activities (15000) net increase in cash 28000 starting cash balance 137000 ending cash balance 165000

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