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 $59,160 $22,450 83,800 78,700 188,220 193,670 70,470 104,880 264,930 196,440 (65,290) (31.330 $601,290 $564,810 Liabilities and Shareholders' Equity Accounts payable Bank loan payable Common shares Retained earnings Total liabilities and shareholders' equity $601.290 $564,810 $40,690 $49,290 151,590 210,530 204,980 172,450 204,030 132,540 Additional information 1. Profit was $109,820 2. Sales were $975,900 3. Cost of goods sold was $751,460 4. Operating expenses were $43,920, exclusive of depreciation expense 5. Depreciation expense was $33,960 6. Interest expense was $14,820 7. Income tax expense was $26,800 8. Land was sold at a gain of $4,880 9. No equipment was sold during the year. $58,940 of the bank loan was repaid during the year. Common shares were issued for $32,530 10. 11. Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

CASHFLOW STATEMENT Cashflows from Operating Activites Cash received from Accounts rceceivable 970800 (975900+78700-83800) Cash paid for Accounts payable -754610 (751460+188220-193670+49290-40690) Cash paid for operating expense -43920 Casah paid for tatxes -26800 -825330 Net cash provided from Operating Activities 145470 Cashflows ffrom Investing Activities: Sale of Land (104880-70470+4880) 39290 Purchase of Equipment -68490 (264930-196440) Net cash iused in invnesting activities -29200 Cashflows from Financing activities: Repayment of laon -58,940 Interest paud -14820 Dividend paid (132540+109820-204030) -38330 Issue of common stock 32530 Net cash usued in financing Activities -79560 Net Increasse in cash 36710 Add: beginning Balance in cash 22450 Ending Balance in Cash 59160

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