Exercise 13-12 (Direct Method) The comparative unclassified statement of financi

Question

Exercise 13-12 (Direct Method) The comparative unclassified statement of financial position for Puffy Ltd. follows: PUFFY LTD. Statement of Financial Position December 31 Assets Cash Accounts receivable Merchandise inventory Land Equipment Accumulated depreciation Total assets 2015 2014 $53,190 $23,380 73,730 181,100 185,750 71,360 101,290 262,930 195,910 (30,450) $580,430 $549,610 78,230 66,380) Liabilities and Shareholders' Equity Accounts payable Bank loan payable Common shares Retained earnings Total liabilities and shareholders' equity $580,430 $38,740 47,300 145,220 196,340 197,950 172,270 198,520 133,700 $549,610

Explanation / Answer

PUFFY LTD. Statement of Cash flows - Direct Method Year ended December 31,2015 Cash flow from operating activities Receipts received from Customers $972,860.00 Cash Payments Paid to suppliers -$756,000.00 Paid for expenses -$42,560.00 Interest expense -$14,490.00 Income Tax expense -$27,950.00 -$841,000.00 Net Cash available from Operating activities $131,860.00 Cash flow from Investing activities Sale of land $34,790.00 Purchase of equipment -$67,020.00 Net Cash used for Investing activities -$32,230.00 Cash flow from Financing activities Repayment of bank loan -$51,120.00 Issue of common shares $25,680.00 Dividend paid -$44,380.00 Net Cash used for Financing activites -$69,820.00 Net Cash Surplus / (deficit) $29,810.00 Add : Cash balance 2014 $23,380.00 Cash balance 2015 $53,190.00 Receipts received from Customers Accounts receivables 2014 $73,730.00 Add : Sales $977,360.00 Less : Accounts Receivable 2015 $78,230.00 Receipts received from Customers $972,860.00 Paid to suppliers Accounts Payable 2014 $47,300.00 Add : Inventory 2015 $181,100.00 Add: Cost of goods sold $752,090.00 Less : Inventory 2014 $185,750.00 Less : Accounts Payable 2015 $38,740.00 Paid to suppliers $756,000.00 Dividend paid Retained Earnings 2014 $133,700.00 Add : Net Income $109,200.00 Less : Retained Earnings 2015 $198,520.00 Dividend paid $44,380.00

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