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Statement of Cash Flows using Direct Method

Prepare a statement of cash flows using the direct method for reporting cash flows from operating activities, omit supporting schedules.

AAA Auto Parts had a cash balance on Dec 31st, 2001 of $48,000. It's net income for 2002 was $464,000. It's 2002 transactions affecting income or cash were (in thousands).

1. Sales of $1,600 all on credit. Cash collections from customers, $1,450.
2. The cost of items sold, $850. Purchases of inventory totaled $900; inventory and accounts payable were affected accordingly.
3. Cash payments on trade accounts payable, $775.
4. Salaries and wages: accrued, $190; paid in cash, $200.
5. Depreciation, $45.
6. Interest expense, all paid in cash, $11.
7. Other expenses, all paid in cash, $100.
8. Income taxes accrued, $40; income taxes paid in cash, $30.
9. Bought plant and facilities for $435 cash.
10. Issued debt for $110 cash.
11. Paid cash dividends of $39.

Solution Summary

Prepares Statement of Cash Flows using Direct Method.