Solution to P14-7A is also attached for reference.
Financial Accounting, 5th ed., ISBN : 0471655279, Author : Jerry J. Weygandt
Prepare a statement of cash flows?direct method. (SO 4)
Data for Ernest Banks Company is presented in P14-7A. Further analysis reveals the following.
Accounts payable relates to merchandise creditors.
All operating expenses, except depreciation expense, were paid in cash.
Prepare a statement of cash flows for Ernest Banks Company for the year ended December 31, 2006, using the direct method.
Net cash provided by operating activities $28,000
Investing activities provided $2,500
Ernest Banks Company
Statement of Cash Flows - Direct Method
For the year ended December 31, 2006
Cash Flows from operating activities:
Cash Receipts from Customers $609,000
To Suppliers $502,500
For operating Expenses 65,000
For interest 5,500
For income tax 8,000 581,000
Net cash Provided by operating ...
The solution explains how to prepare a statement of cash flows using the direct method for Ernest Banks Company