The comparative balance sheets for 2016 and 2015 and the statement of income for
ID: 2582089 • Letter: T
Question
The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Wright Company. Additional information from Wright's accounting records is provided also.
The common stock of Microsoft Corporation was purchased for $28,000 as a short-term investment not classified as a cash equivalent.
Prepare the statement of cash flows of Wright Company for the year ended December 31, 2016. Present cash flows from operating activities by the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 5,000 should be entered as 5).)
The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Wright Company. Additional information from Wright's accounting records is provided also.
Explanation / Answer
Solution:-
WRIGHT COMPANY Statement of Cash Flows For the year ended December 31,2016 Particulars Amount Cash Flows from Operating Activities Cash Receipts from Sale (Sales - Decrease in Accounts Receivables) (460 +110-115) 455 Cash Paid to Vendors (COGS - + Incr in Investory+ Decr in Accounts Payable) (210+5+8) -223 Salaries Expenses (Expenses + Decrease in Accrued) (67 + 2) -69 Interest Expenses (Intt Exp - Decrease in Intt Payable) (17- 2) -15 Income Tax Paid (Income Tax Exp + Decrease in IT Payable) (64 + 4) -68 Cash Generated from Operarting Activities 80 Cash Flows from Investing Activities Sale of Land 14 Purchase of Stock in Microsoft Corporation -28 Purchase of New Equipment -135 Cash Used in Investing Activities -149 Cash Flows from Financing Activities Sale of Bonds 54 Sale of Common Stock 96 Cash Dividend Paid -25 Promissory Note Paid -27 Cash Generated in Financing Activities 98 Total Cash Generated 29