Memphis Corp.. a merchandiser. recently competed its 2009 operations. For the ye
ID: 2428580 • Letter: M
Question
Memphis Corp.. a merchandiser. recently competed 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 and income statement follow Additional Information on Year 2009 Transactions Purchased equipment for $105, 000 cash. Issued 14, 000 shares of common stock for $5 cash per share Declared and paid $85, 000 in cash dividends Required: Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method. (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.) Cash flows from operating activities Cash flows from financing activities Cash balance at beginning of 2008 Cash balance at end of 2009Explanation / Answer
Cash Flow Statement Direct Methode:
Cash Flow Statement Direct Methode:
Net Income 127000 Cash flow from Operating Activities: Add: Depreciation 57000 Increase in accounts payble 64000 Increase in tax payble 3000 Cash increases from operating activities 124000 251000 Less: Increase in receivables 8000 Increase in inventory 95000 Cash decreases from operating activities: 103000 Net Cash flow from Operating Activities: 148000 Cash Flow From Financing Activities: Add: Increase in Common Stock 28000 Increase in paid in capital Excess 42000 70000 218000 Less: Dividend paid 85000 Net Cash Inflow from Financing Activities: 133000 Cash Flow From Investing Activities: Less: Equipment Purchases 105000 Net Cash Out flow from Investing Activities: 28000 Add: Opening Cash balance 137000 Closing Cash Balance: 165000