The accounting staff of Harris Company has assembled the following information f
ID: 2349503 • Letter: T
Question
The accounting staff of Harris Company has assembled the following information for the year ended December 31, 2011: Cash sales $ 776,000 Credit sales 2,500,000 Collections on accounts receivable 2,195,000 Cash transferred from the money market fund to the general bank account 250,000 Interest and dividends received 100,000 Purchases (all on account) 1,800,000 Payments on accounts payable to merchandise suppliers 1,510,000 Cash payments for operating expenses 1,045,000 Interest paid 180,000 Income taxes paid 95,000 Loans made to borrowers 500,000 Collections on loans (excluding receipts of interest) 260,000 Cash paid to acquire plant assets 3,100,000 Book value of plant assets sold 668,200 Loss on sales of plant assets 77,700 Proceeds from issuing bonds payable 2,500,000 Dividends paid 120,000 Cash and cash equivalents, Jan. 1 489,000 Instructions: Prepare a statement of cash flows. Use the direct method of reporting cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.) HARRIS COMPANY Statement of Cash Flows For the Year Ended December 31, 2011 Cash flows from operating activities: $ Cash operating activities $ $ Cash operating activities Net cash flow from operating activities $ Cash flows from investing activities: Net cash investing activities: Cash flows from financing activities: $ Net cash financing activities Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ (1) Compute the amount of collections from customers. (Omit the "$" sign in your response.) Cash received from customers $ (2) Compute the amount of cash paid to suppliers and employees. (Omit the "$" sign in your response.) Cash paid to suppliers and employees $ (3) Compute the amount of proceeds from sales of plant assets. (Omit the "$" sign in your response.) Proceeds from sales of plant assets $ check my workeBook Links (3)referencesExplanation / Answer
Statement of Cash flows
Cash flows from operating activities
cash received from customers
2,971,000
interest and dividends received
100,000
cash paid for merchandise
-1,510,000
cash paid for other operating expenses
-1,045,000
interest paid
-180,000
cash paid for income taxes
-95,000
net cash provided by oeprating activities
241,000
Cash flows from investing activities
Loans made to borrows
-500,000
Collections from loans to borrowers
260,000
cash paid for assets
-3,100,000
cash from sale of assets
590,500
net cash provided by investing activities
-2,749,500
Cash flows from financing activities
proceeds from issuing bonds
2,500,000
payment of dividend
-120,000
net cash provided by financing activities
2,380,000
net increase in cash
-128,500
Cash balance, beginning
489,000
cash balance, ending
360,500
(1) Compute the amount of collections from customers.
Cash sales $ 776,000 + Collections on accounts receivable 2,195,000 = $2,971,000
Answer: $2,971,000
(2) Compute the amount of cash paid to suppliers and employees. (Omit the "$" sign in your response.) Cash paid to suppliers and employees $
Cash paid to suppliers = $1,510,000
Answer: $1,510,000
(3) Compute the amount of proceeds from sales of plant assets. (Omit the "$" sign in your response.) Proceeds from sales of plant assets $
Book value of plant assets sold 668,200 - Loss on sales of plant assets 77,700 = $590,500
Answer: $590,500
Statement of Cash flows
Cash flows from operating activities
cash received from customers
2,971,000
interest and dividends received
100,000
cash paid for merchandise
-1,510,000
cash paid for other operating expenses
-1,045,000
interest paid
-180,000
cash paid for income taxes
-95,000
net cash provided by oeprating activities
241,000
Cash flows from investing activities
Loans made to borrows
-500,000
Collections from loans to borrowers
260,000
cash paid for assets
-3,100,000
cash from sale of assets
590,500
net cash provided by investing activities
-2,749,500
Cash flows from financing activities
proceeds from issuing bonds
2,500,000
payment of dividend
-120,000
net cash provided by financing activities
2,380,000
net increase in cash
-128,500
Cash balance, beginning
489,000
cash balance, ending
360,500
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