Problem 131A Format of a Statement of Cash Flows (L0132,L0133,L013 The accountin
ID: 2543857 • Letter: P
Question
Problem 131A Format of a Statement of Cash Flows (L0132,L0133,L013 The accounting staff of Lambert Company has assembled the following information for the year ended December 31, 2015 Cash sales Credit sales Collections on accounts receivable Cash transferred from the money market fund to the general bank account Interest and dividends received Purchases (all on account) Payments on accounts payable to merchandise suppliers Cash payments for operating expenses Interest paid Income taxes paid Loans made to borrowers Collections on loans (excluding receipts of interest) Cash paid to acquire plant assets Book value of plant assets sold Loss on sales of plant assets Proceeds from issuing bonds payable Dividends paid Cash and cash equivalents, Jan. 1 $ 807,000 2,500,000 2,205,000 250,000 100,000 1,800,000 1,510,000 1,045,000 180,000 95,000 500,000 260,000 3,100,000 661,300 81,500 2,500,000 120,000 489,000 Instructions a. Prepare a statement of cash flows. Use the direct method of reporting cash flows from operat activities (List any deduction in cash and cash outflows as negative amounts.)Explanation / Answer
a. Cash Flow statement.
b1. Amount of Collections from customers = $ 2205000 + $ 807000 = $ 3012000.
b2. Amount of Cash paid to suppliers & employees = $ 1510000
b3. Proceeds from Sale of plant assets = $ 661300
A) Cash Flow from Operating Activities Cash Sales $807,000 Collections on account receivables $2,205,000 payments to merchandise suppliers ($1,510,000) Cash payment for operating expenses ($1,045,000) Income Taxes paid ($95,000) A) $362,000 B) Cash Flow from Investing Activities Interest & Dividend received $100,000 Loans made to borrowers ($500,000) Collections on Loans $260,000 (Excluding receipts of Interest) Cash transferred from money market fund to General bank account $250,000 Cash paid to acquire plant assets ($3,100,000) Book value of plant assets sold $661,300 B) ($2,328,700) C) Cash Flow from Financing Activities Interest Paid ($180,000) Proceeds from issuing bonds payable $2,500,000 Dividend paid ($120,000) C) $2,200,000 D) Net (A+B+C) $233,300 Add: Cash & Cash Equivalents beginning of year (Given) $489,000 E) Cash & Cash Equivalents end of year $722,300