King Island, Inc. began 2016 with cash of $20,000. During the year, King Island
ID: 2459240 • Letter: K
Question
King Island, Inc. began 2016 with cash of $20,000. During the year, King Island earned revenue of $150,000 and collected $60,000 from customers. Expenses for the year totaled $147,000, of which King Island paid $75,000 in cash to suppliers and $50,000 in cash to employees. The company received $2,400 cash for interest revenue and paid $7,000 for income taxes. King Island also paid $36,000 to purchase equipment and a cash dividend of $12,000 to its stockholders during 2016. Prepare the company's operating activities section of the statement of cash flows for the year ended December 31, 2016. Use the direct method. (Use parentheses or a minus sign for net cash used for operating activities. If a box is not used in the statement leave the box empty; do not select a label or enter a zero.)Explanation / Answer
King Island Inc.
Statement of Cash Flow (Partial)
Year Ended December 31, 2016
Cash Flow from Operating Activities :
Receipts: Amount ($) Amount ($)
Cash collected from Customers 60,000
Total Cash Receipts 60,000
Payments:
Cash to Suppliers 75000
Cash to Employees 50000
Paid Income Taxes 7000
Total Cash Payments 132,000
Net Cash Provided by (Used for) Operating Activities (72,000)
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