Problem 23-3 Crane Company has not yet prepared a formal statement of cash flows

Question

Problem 23-3 Crane Company has not yet prepared a formal statement of cash flows for the 2017 fiscal year. Comparative balance sheets as of December 31, 2016 and 2017, and a statement of income and retained earnings for the year ended December 31, 2017, are presented as follows CRANE COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2017 ($000 OMITTED) Sales revenue $3,780 Expenses Cost of goods sold Salaries and benefits Heat, light, and power Depreciation Property taxes Patent amortization Miscellaneous expenses Interest $1,200 710 70 90 20 30 10 30 Income before income taxes Income taxes Net income Retained earnings-Jan. 1, 2017 2,160 1,620 810 810 290 1,100 570 Stock dividend declared and issued

Explanation / Answer

Cash Flow Statement :-

Particulars Amount($) Amount($) Cash flow from Operating Activities :- Cash Collection from Customer ($3780+$520-$780) 3520 Sale of US Treasury notes 40 Less :-   Cash Payment for Suppliers ($1200+$360-$456-$550+$730) (1284) Salaries and Benefits (710) Heat, Light and Power (70) Property Taxes (20) Misc. Expenses (10) Interest Expenses (30) Income Tax Paid ($810+$30-$37) (803) Net Cash Flow from Operating Activity 633 633 Cash Flow from Investing Activity :- Land Purchase ($160-$70) (90) Building Purchase ($930-$600) (330) Net Cash Flow from Investing Activity (420) (420) Cash Flow from Financial Activity :- Issue of Common Stock ($1250-$680) 570 Dividend Paid (570) Net Cash Flow from Financial Activity $0 $0 Net Cash Flow $213 Add : Begninning Balance Of Cash $70 Closing Balance of Cash $283

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