The accounting staff of Harris Company has assembled the following information f

Question

The accounting staff of Harris Company has assembled the following information for the year ended December 31, 2011:

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.)

Cash sales $ 723,000 Credit sales 2,500,000 Collections on accounts receivable 2,205,000 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 1,470,000 Cash payments for operating expenses 1,055,000 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 654,300 Loss on sales of plant assets 81,600 Proceeds from issuing bonds payable 2,500,000 Dividends paid 120,000 Cash and cash equivalents, Jan. 1 489,000

Explanation / Answer

Statement of Cash flows

Cash flows from operating activities

cash received from customers

2,205,000

interest and dividends received

100,000

cash paid for merchandise

-1,470,000

cash paid for other operating expenses

-1,055,000

interest paid

-180,000

cash paid for income taxes

-95,000

net cash provided by oeprating activities

241,000

Statement of Cash flows

Cash flows from operating activities

cash received from customers

2,205,000

interest and dividends received

100,000

cash paid for merchandise

-1,470,000

cash paid for other operating expenses

-1,055,000

interest paid

-180,000

cash paid for income taxes

-95,000

net cash provided by oeprating activities

241,000

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