The income statement and supplemental information for Xtra Company are provided below: (see attachment)
a. Acquired equipment for $87,000 by paying cash of $75,750 and is issuing a note payable for the difference.
b. Beginning cash balance, $15,020. Increase in cash, $86,490
c. Collections from customers were $5,250 more than sales
d. Interest revenue, interest expense, and income tax expense equal their cash amounts
e. Issued stock for cash, $22,500
f. Payment of dividends, $8,250
g. Payment of long-term note payable, $11,250
h. Payments to employees were $750 more than salary expense
i. Payments to suppliers were $6,750 less than the sum of cost of goods sold plus advertising expense
j. Sold land for $10,500
Prepare the company's statement of cash flows. Use the direct method of reporting cash flow from operating activities.
Cash Flows from Operating Activity
Cash Receipt from customers 177000
Cash paid to suppliers -20400
Cash paid for Salaries -5610
Cash generated from operations 150990
Income tax paid -6250
Net cash from operating activities 144740
Cash flow from Investing ...
This solution prepares the company's statement of cash flows using the direct method of reporting cash flows from operating activities using the supplemental information and the income statement of 2003.