Use the following information about the cash flows of Valencia Company to prepar

Question

Use the following information about the cash flows of Valencia Company to prepare a complete statement of cash flows (DIRECT METHOD) for the year ended December 31, 2011. Use a note disclosure for any noncash investing and financing activities. Cash and cash equivalents balance, December 31, 2010: $43,000 Cash and cash equivalents balance, December 31, 2011: $120,916 Cash received as interest: $4,300 Cash paid for salaries: $124,700 Bonds payable retired by issuing common stock (no gain or loss on retirement): $180,000 Cash paid to retire long-term notes payable: $215,000 Cash received from sale of equipment: $105,350 Cash received in exchange for six-months note payable: $43,000 Land purchased by issuing long-term note payable: $104,400 Cash paid for store equipment: $40,850 Cash dividends paid: $25,800 Cash paid for other expenses: $68,800 Cash received from customers: $834,000 Cash paid for merchandise: $433,784

Explanation / Answer

Cash at the beginning of the year : 43000 1. Cash from operating activities: Cash received as interest 4300 Cash received from customers 834000 Cash paid for merchandise (433784) Cash paid for other expenses: (68800) Cash paid for salaries (124700) Cash from operating activities: 211016 2. Cash from investing activities Cash paid to long term bonds (215000) Cash received from sale of equipment 105350 Cash received from notes payable 43000 Cash paid for store equipment: (40850) Cash from investing activities : (107500) 3.Cash from financing activities Dividends paid : (25800) Cash from financing activities : (25800) Net Cash from all activities: 77916 Add: Cash at the beginning of the year : 43000 Closing balance of cash = 120916 Notes: Land purchased by issuing bonds is a non-cash investing activity Bonds payable retired by issuing common stock is a non-cash financing activity

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.