The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and
ID: 2440782 • Letter: T
Question
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
The income statement for the year ended December 31, 20Y6, is as follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows:
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $63,770 cash.
The common stock was issued for cash.
There was a $16,800 debit to Retained Earnings for cash dividends declared.
Required:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Dec. 31, 20Y6 Dec. 31, 20Y5 Assets Cash $229,800 $212,040 Accounts receivable (net) 83,250 76,160 Inventories 235,000 225,480 Investments 0 87,360 Land 120,540 0 Equipment 259,280 199,350 Accumulated depreciation (60,700) (53,760) Total assets $867,170 $746,630 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $156,960 $147,090 Accrued expenses payable (operating expenses) 15,610 19,410 Dividends payable 8,670 6,720 Common stock, $10 par 46,830 36,580 Paid-in capital: Excess of issue price over par-common stock 176,040 101,540 Retained earnings 463,060 435,290 Total liabilities and stockholders’ equity $867,170 $746,630Explanation / Answer
Cash flow Statement: Cash flows from Operating Activities: Cash received ffrom Accounts receivable (1392530+76160-83250) 1385440 Cash paid for inventory (573400+235000-225480+147090-156960) -573050 Operating expense paid (723060+19410-15610) -726860 Income tax expense -20970 Net cash provided from Operating activities 64560 Cash flows from Investing activities: Sale of investment 63770 Purchase of land -120540 Purchase of equipment -59,930 Net cash used in Investing activities -116700 Cash flows from financing activities: Dividend paid (16800+6720-8670) -14850 Common Stock issued (46830+176040-36580-101540) 84750 Net cash provided from Financing activities 69900 Net increase in cash 17760 Beginning Balance in cash 212040 Ending balance in cash 229800