Salesonaccountincreaseinaccountsreceivable 5967000

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Unformatted text preview: tivities 176,000 Net cash flow from financing activities Net increase in cash Beginning cash balance, January 1, 2012 Ending cash balance, December 31, 2012 747,000 5,000 2,000 10,000 4,000 (50,000) (50,000) (35,000) (59,000) $ $ (22,000) 125,000 51,000 0 $ 154,000 593,000 $ P14–17 Direct method Price Restaurant Supply Company Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from operating activities: Cash collections from customers $ 165,000 Cash paid to suppliers for inventory (199,000) Cash paid for interest (13,000) Net cash $ (47,000) decrease due to operating activities Cash flows from investing activities: Proceeds sale of plant $ 90,000a Purchase of plant equipment (25,000)a Net cash e q u i p me n t from increase due to investing activities 65,000 Cash flows from financing activities: Proceeds from common stock issue $ 65,000b Payment of dividends (30,000)c Net cash increase due to financing activities 35,000 Net increase in cash $ 53,000 Beginning cash balance, January 1, 2012 120,000 Ending cash balance, December 31, 2012 $ 173,000 a Explanation of activity involving plant equipment: Ending plant equipment $275,000 Equipment purchased = Beginning plant equipment + Equipment purchased – Equipment sold = $350,000 + Equipment purchased – $100,000 = $25,000 Proceeds from sale of equipment = Book value of assets sold + Gain on the sale = [(Asset cost – Accumulated depreciation on asset sold) + Gain on the sale] = [($100,000 – $20,000) + $10,000] = $90,000 b Proceeds from issue of common stock c Dividends = Increase in common stock + Increase in additional paid­in capital (common stock) = $35,000 + $30,000 = $65,000 = Beginning retained earnings + Net income – Ending retained earnings = $204,000 + $37,000 – $211,000 = $30,000 P14–17 Concluded Indirect method Price Restaurant Supply Company Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from operating activities: Net income $ 37,000 Adjustments: Depreciation $ 12,000 Decrease in accoun...
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