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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Operating Cash Flows: Direct Method The following are various cash flows and other information for Smyczek Company:

  1. a. Payments of interest, $8,200
  2. b. Receipt from sale of land, $7,900
  3. c. Interest collected, $10,000
  4. d. Payment of dividends, $12,100
  5. e. Depreciation expense, $24,700
  6. f. Collections from customers, $101,600
  7. g. Payments of income taxes, $15,400
  8. h. Receipt from issuance of stock, $18,900
  9. i. Payments to suppliers and employees, $67,500
  10. j. Increase in inventories, $4,600

Required:

Using the direct method, prepare the operating activities section of Smyczek’s statement of cash flows.

To determine

Prepare the operating activities section of Company S’s statement of cash flows, under direct method.

Explanation

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.

Operating activities include cash inflows and outflows from business operations.

Prepare the operating activities section of Company S’s statement of cash flows, under direct method as follows:

Company S
Statement of Cash Flows (Partial)
For Year Ended December 31, 2018
Operating Activities:
Cash inflows:

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