Please type the answer, dont take the picture. ACE Corp provided the following i
ID: 2598177 • Letter: P
Question
Please type the answer, dont take the picture.
ACE Corp provided the following information for the year ended December 31, 2014: Cash paid for interest, $20,000 Cash sales, $83,000 Collected cash from customers with sales on account, $57,000 Cash paid for dividends, $6,000 Cash dividends received, $4,000 Purchased inventory on account, $125,000 Cash proceeds from bank loan, $29,000 Cash purchase of treasury stock, $11,000 Cash paid for equipment purchase, $27,000 Paid vendors, $100,000 Cash received from issuance of common stock, $37,000 Employee wages earned, $100,000 Employee wages accrued at year-end, $35,000 Cash received from sale of land with a $32,000 book value, $25,000 Acquisition of land costing S51,000 in exchange for preferred stock issuance Payment of a $100,000 note payable by exchanging used machinery with a $77,000 book value and $100,000 fair value Calculate net cash flow from operating, investing, and financing activities.Explanation / Answer
ACE Corp
Statement of Cash Flows
For the year ended December 31, 2014
Note: Purchase of inventory and acquisition of land are not recorded a part of the statment of cash flows since they do not involve cash. Also, the note paid was exchanged for machinery which had a fair value that id determinable and is equal to the value of the note.
Cash flow from operating activities Cash sales $83,000 Cash collections from customers with sales on account 57,000 Cash paid for interest (20,000) Cash paid to vendors (100,000) Employee wages paid (100,000-35,000) (65,000) Net cash used in operating activities $(45,000) Cash flow from investing activities Cash recieved from sale of land $25,000 Cash dividend received 4,000 Cash paid for equipment purchase (27,000) Net cash flow from investing activities $2,000 Cash flow from financing activities Issuance of common stock $37,000 Cash proceeds from bank loan 29,000 Cash dividend paid (6,000) Cash used to purchase treasury stock (11,000) Net cash flow from financing activities $49,000 Net increase in cash $6,000