The income statement and selected balance sheet information for Calendars Incorp
ID: 2801070 • Letter: T
Question
The income statement and selected balance sheet information for Calendars Incorporated for the year ended December 31 is presented below.
Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated by a minus sign.)
The income statement and selected balance sheet information for Calendars Incorporated for the year ended December 31 is presented below.
Income Statement Sales Revenue $ 75,000 Expenses: Cost of Goods Sold 34,500 Depreciation Expense 15,700 Salaries and Wages Expense 9,700 Rent Expense 2,200 Insurance Expense 1,150 Interest Expense 1,050 Utilities Expense 850 Net Income $ 9,850 Selected Balance Sheet Accounts Ending Balances Beginning Balances Inventory $ 445 $ 520 Accounts Receivable 1,650 1,380 Accounts Payable 1,330 1,560 Salaries and Wages Payable 580 315 Utilities Payable 110 0 Prepaid Rent 90 120 Prepaid Insurance 65 80 Required:Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated by a minus sign.)
CALENDARS INCORPORATED Statement of Cash Flows (Partial) For the Year Ended December 31 Cash Flows from Operating Activities: $0Explanation / Answer
STATEMENT OF CASH FLOWS (DIRECT METHOD) Cash flows from operating activities: Cash collected from receivables (75000+1380-1650) 74730 Cash paid to suppliers (34500+1560-1330+445-520) -34655 Cash for operating expenses -13480 [see note below] Interest paid -1050 Net cash provided by operating activities 25545 Note: Cash paid for operating expenses: Salaries & wages expense 9700 Rent expense 2200 Insurance expense 1150 Utiities expense 850 Total amount expense 13900 Add: Beginning balance of salaries & wages payable 315 Beginning balance of utilities payable 0 Ending balance of prepaid rent 90 Ending balance of prepaid insurance 65 470 Less: Ending balance of salaries & wages payable 580 Ending balance of utilities payable 110 Beginning balance of prepaid rent 120 Beginning balance of prepaid insurance 80 890 Cash payment for operating expenses 13480
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