The following Cash T-account shows the total debits and total credits to the Cash account of Thomas Corporation for the current year. 1. Prepare a complete statement of cash flows for the current year using the direct method. 2. Refer to the statement of cash flows prepared for part 1 to answer the following questions. (a) Which section—operating, investing, or financing—shows the largest cash (i) inflow and (ii) outflow? (b) What is the largest individual item among the investing cash outflows? (c) Are the cash proceeds larger from issuing notes or issuing stock? (d) Does the company have a net cash inflow or outflow from borrowing activities? CashBalance, Dec. 31, prior yearReceipts from customersReceipts from dividendsReceipts from land saleReceipts from machinery saleReceipts from issuing stockReceipts from borrowing333,0005,000,000 Payments for inventory208,400 Payments for wages220,000 Payments for rent710,000 Payments for interest .1,540,000 Payments for taxes..3,600,000 Payments for machinery.2,590,000550,000320,000218,000450,0002,236,0001,260,000386,000........Payments for stock investmentsPayments for note payable.Payments for dividends.Payments for treasury stock.500,000218,000Balance, Dec. 31, current year.........

Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Answered: Cash Balance, Dec. 31, prior year…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The following Cash T-account shows the total debits and total credits to the Cash account of Thomas
Corporation for the current year.
1. Prepare a complete statement of cash flows for the current year using the direct method.
2. Refer to the statement of cash flows prepared for part 1 to answer the following questions. (a) Which
section—operating, investing, or financing—shows the largest cash (i) inflow and (ii) outflow?
(b) What is the largest individual item among the investing cash outflows? (c) Are the cash proceeds
larger from issuing notes or issuing stock? (d) Does the company have a net cash inflow or outflow
from borrowing activities?

Cash
Balance, Dec. 31, prior year
Receipts from customers
Receipts from dividends
Receipts from land sale
Receipts from machinery sale
Receipts from issuing stock
Receipts from borrowing
333,000
5,000,000 Payments for inventory
208,400 Payments for wages
220,000 Payments for rent
710,000 Payments for interest .
1,540,000 Payments for taxes..
3,600,000 Payments for machinery.
2,590,000
550,000
320,000
218,000
450,000
2,236,000
1,260,000
386,000
........
Payments for stock investments
Payments for note payable.
Payments for dividends.
Payments for treasury stock.
500,000
218,000
Balance, Dec. 31, current year
.........

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