C. Prepare a statement of cash flow on the direct method 2017 2016 Assets: Cash

Question

C. Prepare a statement of cash flow on the direct method 2017 2016 Assets: Cash Accounts receivable, net Inventory Property, plant & equipment Accumulated depreciation Total Assets 215,000 87,000 54,000 750,000 (110,000) 996,000 70,000 65,000 60,000 600,000 (60,000) 735,000 Liabilities & Equity Accounts payable Accrued liabilities Common stock Retained earnings Total liabilities and equity 44,000 41,000 460,000 451,000 996,000 40,000 40,000 460,000 195,000 735,000 Sales Cost of goods sold Gross profit 1,450,000 775,000 675,000 Operating expenses Pre-tax income Income taxes Net income 225,000 450,000 90,000 360,000

Explanation / Answer

Particulars ($) Opening Cash 70,000 Cash proceeds from Sales 14,50,000 Cost of goods sold   (7,75,000) Operating expenses incurred (2,25,000) Increase in Account Receivables (22,000) Decrease in Stock 6,000 Increase in PPE (1,50,000) Increase in Accounts payable 4,000 Increase in Accrued liabilities 1,000 Tax paid (90,000) Accumulated Depreciation 50,000 Dividend Paid (4,51,000-1,95,000) (1,04,000) Closing Cash 2,15,000

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