Cash sales Credit sales Collections on accounts receivable Cash transferred from the money market fund to the general bank account Interest and dividends received Purchases (all on account) Payments on accounts payable to merchandise suppliers Cash payments for operating expenses (including payroll) Interest paid Income taxes paid Loans made to borrowers Collections on loans (excluding receipts of interest) Cash paid to acquire plant assets Book value of plant assets sold Loss on sales of plant assets Proceeds from issuing bonds payable Dividends paid Cash and cash equivalents, Jan. 1 $ 863,000 2,500,000 2,205,000 250,000 100,000 1,800,000 1,500,000 1,055,000 180,000 95,000 500,000 260,000 3,100,000 659,600 76,300 2,500,000 120,000 512,000 Required: a. Prepare a statement of cash flows. Use the direct method of reporting cash flows from operating activities.. b-1. Compute the amount of collections from customers. b-2. Compute the amount of cash paid to suppliers and employees. b-3, Compute the amount of proceeds from sales of plant assets.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
can you just CHECK to see if A is correct please?
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