The accounting staff of Wyoming Outfitters, Inc., has assembled the following in
ID: 2398953 • Letter: T
Question
The accounting staff of Wyoming Outfitters, Inc., has assembled the following information for the current year ended December 31.
Cash and cash equivalents, Jan. 1
$
35,800
Cash and cash equivalents, Dec. 31
137,700
Cash paid to acquire plant assets
22,000
Proceeds from short-term borrowing
10,000
Loans made to borrowers
4,200
Collections on loans (excluding interest)
4,000
Interest and dividends received
42,100
Cash received from customers
815,000
Proceeds from sales of plant assets
9,000
Dividends paid
45,000
Cash paid to suppliers and employees
624,000
Interest paid
19,000
Income taxes paid
64,000
Using this information, prepare a statement of cash flows under direct method. (List any deduction in cash and cash outflows as negative amounts.)
Cash and cash equivalents, Jan. 1
$
35,800
Cash and cash equivalents, Dec. 31
137,700
Cash paid to acquire plant assets
22,000
Proceeds from short-term borrowing
10,000
Loans made to borrowers
4,200
Collections on loans (excluding interest)
4,000
Interest and dividends received
42,100
Cash received from customers
815,000
Proceeds from sales of plant assets
9,000
Dividends paid
45,000
Cash paid to suppliers and employees
624,000
Interest paid
19,000
Income taxes paid
64,000
Explanation / Answer
Wyoming Outfitters, Inc.,
Statement of cash flow under direct method
For the year ended 31/12/2XXX
Cash flows from Operating activites:
Cash received from customers $815,000
Cash paid to supplies and employees ($624,000)
Interest paid ($19,000)
Income taxed paid ($64,000)
NET CASH PROVIDED BY OPERATING ACTIVITIES (A) $108,000
Cash flows from Investing activites:
Cash paid to acquire plant assets ($22,000)
Proceeds from sales of plant assets $9,000
Interest and dividends received $42,100
Loans made to borrowers ($4,200)
Collections on loans $4,000
NET CASH PROVIDED BY INVESTING ACTIVITIES (B) $28,900
Cash flow from Financing activities:
Proceeds from short-term borrowing $10,000
Dividend paid ($45,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES (C) ($35,000)
Net increase in cash and cash equivalents (A+B+C) $101,900
Cash and cash equivalents at beginning of period i.e on jan 1 $35,800
Cash and cash equivalents at end of period i.e on dec 31 $137,700
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