The Extra Surplus Company\'s Balance Sheet for December 31, 2015 and the Income
ID: 2479407 • Letter: T
Question
The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below.
Other expenses were on account.
Prepare the statement of cash flows using the direct method. (Enter any deductions and cash outflows as a negative value.)
The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below.
EXTRA SURPLUS COMPANY Statement of Cash Flows Year End December 31, 2016 Cash Flows from Operating Activities: Cash collected from customers Cash paid to suppliers of inventory Cash paid to employees Cash paid for interest Net cash used in operating activities Cash Flows from Investing Activities: Purchase of land Proceeds from sale of land Net cash used in investing activities Cash Flows from Financing Activities: Payments on long-term debt Proceeds from issuing common stock Payment of cash dividends Net cash provided by financing activities Net increase in cash during the year Cash in the beg. period Cash and cash equivalents, end of periodExplanation / Answer
Cash flow statement for the year using direct method: Particulars Amount Cash flows from operating activities Cash received from customers $19,200 Cash paid for inventory ($13,900) Cash paid for salaries and wage expense ($7,200) Cash paid for interest on notes payable ($2,400) Cash from operating activities ($4,300) Cash from investing operations Purchase of property ($24,000) Sale of property $12,000 Net cash from investing activities ($12,000) Cash from Financing activities Notes payable repaid ($2,400) New common stock issued $24,000 Dividends paid ($3,800) Net cash from financing activities $17,800 Net increase or decrease in cash for the year $1,500 Add: Opening balance $17,000 Closing cash balance $18,500
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