Use the following information for the Problems below.Skip to question [The following information applies to the questions displayed below.]Lansing Company’s current-year income statement and selected balance sheet data at December 31 of the current and prior years follow. LANSING COMPANYIncome StatementFor Current Year Ended December 31Sales revenue$127,200 Expenses Cost of goods sold 52,000 Depreciation expense 17,000 Salaries expense 28,000 Rent expense 10,000 Insurance expense 4,800 Interest expense 4,600 Utilities expense 3,800 Net income$7,000 LANSING COMPANYSelected Balance Sheet AccountsAt December 31Current Year Prior YearAccounts receivable $6,600 $7,800 Inventory 2,980 2,040 Accounts payable 5,400 6,600 Salaries payable 1,080 800 Utilities payable 420 260 Prepaid insurance 360 480 Prepaid rent 420 280 Problem 16-2AB Direct: Computing cash flows from operations LO P5 **Problem 16-2AB Direct: Computing cash flows from operations LO P5****Required:**Prepare the operating activities section of the statement of cash flows using the *direct method* for the current year. *(Amounts to be deducted should be indicated with a minus sign.)*---**LANSING COMPANY****Cash Flows from Operating Activities—Direct Method****For Current Year Ended December 31**| Cash flows from operating activities | | |---------------------------------------|------|| Net income | || | || | || | || | || | || | || | || | || | || | || \_________ | $ 0 |This table outlines the structure for reporting cash flows from operating activities using the direct method. Specific cash flow items would typically be listed with corresponding amounts, but these amounts are not provided here. The net income and total cash flow are placeholders for actual figures that would be calculated when the required data is available.

Statement of Cash Flows Net Income AMOUNT Cash flows from operating activities Cash receipts from customers 128400 Cash paid to suppliers (54140) Cash Paid for Salaries Expenses (27720) Cash paid for Rent Exenses ( 10,000+ 140) (10140) Cash Paid for Insurance Expens(4,800-120) (4680) Interest Expenses (4,600) Utilities Expenses (3,800-160) (3640) Net cash from operating activities 23480Working notes: 1 Calculation of cash collection from customer Sales 127,200 Add: Opening AR 7,800 Less: Closing AR 6,600 Cash Collected 128400 Working notes: 2 Calculation of purhcase of inventory Cost of Goods Sold 52,000 Add: Closing inventory 2,980 Less : Opening Inventory 2,040 Material Purhcased 52940 Calculation of amount paid to supplied Op. Balance of Acct Payable 6,600 Add: Purchases 52940 Less: Cl. Balance of Account payable 5,400 Cash paid 54140 Salaries Expenses: Op. Balance 800 Add: 28,000 Cl Balance 1,080 27720

Answered: Lansing Company’s current-year income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information for the Problems below.

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[The following information applies to the questions displayed below.]

Lansing Company’s current-year income statement and selected balance sheet data at December 31 of the current and prior years follow.

LANSING COMPANY Income Statement For Current Year Ended December 31
Sales revenue	$	127,200
Expenses
Cost of goods sold		52,000
Depreciation expense		17,000
Salaries expense		28,000
Rent expense		10,000
Insurance expense		4,800
Interest expense		4,600
Utilities expense		3,800
Net income	$	7,000

LANSING COMPANY Selected Balance Sheet Accounts
At December 31	Current Year		Prior Year
Accounts receivable		$	6,600	$	7,800
Inventory			2,980		2,040
Accounts payable			5,400		6,600
Salaries payable			1,080		800
Utilities payable			420		260
Prepaid insurance			360		480
Prepaid rent			420		280

Problem 16-2AB Direct: Computing cash flows from operations LO P5

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