Lansing Company’s 2015 income statement and selected balance sheet data (for cur
ID: 2475353 • Letter: L
Question
Lansing Company’s 2015 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2014 and 2015, follow.
At December 31
2015
2014
Prepare the cash flows from operating activities section only of the company’s 2015 statement of cash flows using the DIRECT method. (Amounts to be deducted should be indicated with a minus sign.)
Lansing Company’s 2015 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2014 and 2015, follow.
Explanation / Answer
Cash Flow from Operating Activities:
Cash Receipts from Customers
Net Sales $59,600
+ Beginning Accounts Receivable $404
- Ending Accounts Receivable ($390) $59,614
Cash Payments to Suppliers
Purchases
+ Ending Inventory $95
- Beginning Inventory ($76)
+ Beginning Accounts Payable $128
- Ending Accounts Payable ($119) ($28)
Cash Payments to Employees
+ Beginning Salaries Payable $33
- Ending Salaries Payable ($40)
+ Salaries Expense $10,000 ($9,993)
Cash Payments for Purchase of Prepaid Assets
+ Ending Utilities Expense $7
+ Ending Prepaid Insurance $11
+ Ending Rent $8
+ Expired Rent $3,000
+ Expired Utilities Expense $1,200
+ Expired Insurance $1,900
- Beginning Utilities Expense ($4)
- Beginning Rent ($4)
- Beginning Prepaid Insurance ($12) ($6,106)
Interest Payments
Interest Expense ($1,900)
Income Tax Expense 0
Net Cash Flow from Operating Activities $41,587
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