The comparative balance sheet of Canace Products Inc. forDecember 31, 2016 and 2015, is shown as follows:
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$643,460.00
$679,530.00
4
Accounts receivable (net)
566,490.00
548,320.00
5
Inventories
1,010,720.00
982,600.00
6
Investments
0.00
240,910.00
7
Land
519,510.00
0.00
8
Equipment
879,710.00
680,990.00
9
Accumulated depreciation-equipment
(243,750.00)
(200,970.00)
10
Total assets
$3,376,140.00
$2,931,380.00
11
Liabilities and Stockholdersâ Equity
12
Accounts payable (merchandise creditors)
$772,290.00
$748,770.00
13
Accrued expenses payable (operating expenses)
63,970.00
69,800.00
14
Dividends payable
8,000.00
7,040.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over parâcommon stock
408,000.00
192,000.00
17
Retained earnings
2,067,880.00
1,881,770.00
18
Total liabilities and stockholdersâ equity
$3,376,140.00
$2,931,380.00
The income statement for the year ended December 31, 2016, is asfollows:
1
Sales
$5,974,620.00
2
Cost of merchandise sold
2,451,470.00
3
Gross profit
$3,523,150.00
4
Operating expenses:
5
Depreciation expense
$42,780.00
6
Other operating expenses
3,099,440.00
7
Total operating expenses
3,142,220.00
8
Operating income
$380,930.00
9
Other expense:
10
Loss on sale of investments
(64,890.00)
11
Income before income tax
$316,040.00
12
Income tax expense
102,160.00
13
Net income
$213,880.00
Additional data obtained from an examination of the accounts inthe ledger for 2016 are as follows:
A. Equipment and land were acquired for cash. B. There were no disposals of equipment during the year. C. The investments were sold for $176,020 cash D. The common stock was issued for cash. E. There was a $27,770 debit to Retained Earnings for cashdividends declared.
Prepare a statement of cash flows, using the direct method ofpresenting cash flows from operating activities. Be sure tocomplete the heading of the statement. Refer to the Labels andAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign only toindicate the net cash outflows for each section. âDeductâ, âLessâor colons (:) will automatically appear if required.
Labels and Amount Descriptions
Cash paid for dividends Cash paid for purchase of equipment Cash paid for purchase of land Cash paid for purchase of treasury stock Cash payments for income taxes Cash payments for merchandise Cash payments for operating expenses Cash received from customers Cash received from sale of common stock Cash received from sale of investments December 31, 2016 Decrease in cash Depreciation For the Year Ended December 31, 2016 Gain on sale of investments Increase in cash Issuance of common stock for acquisition of land Issuance of common stock for purchase of equipment Loss on sale of investments Net cash flow from financing activities Net cash flow from investing activities Net cash flow from operating activities Net cash flow used for financing activities Net cash flow used for investing activities Net cash flow used for operating activities
Prepare a statement of cash flows, using the direct method ofpresenting cash flows from operating activities. Be sure tocomplete the heading of the statement. Refer to the Labels andAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign only toindicate the net cash outflows for each section. âDeductâ, âLessâor colons (:) will automatically appear if required.
Canace Products Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
4
5
6
7
8
Cash flows from investing activities:
9
10
11
12
13
14
Cash flows from financing activities:
15
16
17
18
19
Cash at the beginning of the year
20
Cash at the end of the year
The comparative balance sheet of Canace Products Inc. forDecember 31, 2016 and 2015, is shown as follows:
1 | Dec. 31, 2016 | Dec. 31, 2015 | |
2 | Assets | ||
3 | Cash | $643,460.00 | $679,530.00 |
4 | Accounts receivable (net) | 566,490.00 | 548,320.00 |
5 | Inventories | 1,010,720.00 | 982,600.00 |
6 | Investments | 0.00 | 240,910.00 |
7 | Land | 519,510.00 | 0.00 |
8 | Equipment | 879,710.00 | 680,990.00 |
9 | Accumulated depreciation-equipment | (243,750.00) | (200,970.00) |
10 | Total assets | $3,376,140.00 | $2,931,380.00 |
11 | Liabilities and Stockholdersâ Equity | ||
12 | Accounts payable (merchandise creditors) | $772,290.00 | $748,770.00 |
13 | Accrued expenses payable (operating expenses) | 63,970.00 | 69,800.00 |
14 | Dividends payable | 8,000.00 | 7,040.00 |
15 | Common stock, $2 par | 56,000.00 | 32,000.00 |
16 | Paid-in capital: Excess of issue price over parâcommon stock | 408,000.00 | 192,000.00 |
17 | Retained earnings | 2,067,880.00 | 1,881,770.00 |
18 | Total liabilities and stockholdersâ equity | $3,376,140.00 | $2,931,380.00 |
The income statement for the year ended December 31, 2016, is asfollows:
1 | Sales | $5,974,620.00 | |
2 | Cost of merchandise sold | 2,451,470.00 | |
3 | Gross profit | $3,523,150.00 | |
4 | Operating expenses: | ||
5 | Depreciation expense | $42,780.00 | |
6 | Other operating expenses | 3,099,440.00 | |
7 | Total operating expenses | 3,142,220.00 | |
8 | Operating income | $380,930.00 | |
9 | Other expense: | ||
10 | Loss on sale of investments | (64,890.00) | |
11 | Income before income tax | $316,040.00 | |
12 | Income tax expense | 102,160.00 | |
13 | Net income | $213,880.00 |
Additional data obtained from an examination of the accounts inthe ledger for 2016 are as follows:
A. | Equipment and land were acquired for cash. |
B. | There were no disposals of equipment during the year. |
C. | The investments were sold for $176,020 cash |
D. | The common stock was issued for cash. |
E. | There was a $27,770 debit to Retained Earnings for cashdividends declared. |
Prepare a statement of cash flows, using the direct method ofpresenting cash flows from operating activities. Be sure tocomplete the heading of the statement. Refer to the Labels andAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign only toindicate the net cash outflows for each section. âDeductâ, âLessâor colons (:) will automatically appear if required.
Labels and Amount Descriptions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cash paid for dividends | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash paid for purchase of equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash paid for purchase of land | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash paid for purchase of treasury stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash payments for income taxes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash payments for merchandise | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash payments for operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash received from customers | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash received from sale of common stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash received from sale of investments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Decrease in cash | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on sale of investments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Increase in cash | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for acquisition of land | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for purchase of equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss on sale of investments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow from financing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow from investing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow from operating activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow used for financing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow used for investing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net cash flow used for operating activities Prepare a statement of cash flows, using the direct method ofpresenting cash flows from operating activities. Be sure tocomplete the heading of the statement. Refer to the Labels andAmount Descriptions list provided for the exact wording of theanswer choices for text entries. Use the minus sign only toindicate the net cash outflows for each section. âDeductâ, âLessâor colons (:) will automatically appear if required.
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