The following information is available for Culver Corporation for the year ended December 31, 2018. Cash used to reacquire preferred shares $57,600 Cash dividends paid 21,500 Cash paid for interest 22,100 Net income 471,100 Sales 802,000 Cash paid for income tax 90,000 Cash received from customers 566,800 Cash received as proceeds from disposal of building 202,100 Cash paid for operating expenses 84,000 Cash paid to employees 105,000 Beginning cash balance 11,000 Cash paid to suppliers 181,300 Cash received from issuing common shares 360,000 Cash paid to redeem bonds at maturity 240,000 Cash paid to purchase equipment 113,600 Ending cash balance 224,800 Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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.
The following information is available for Culver Corporation for the year ended December 31, 2018.
| Cash used to reacquire |
$57,600 | ||
| Cash dividends paid | 21,500 | ||
| Cash paid for interest | 22,100 | ||
| Net income | 471,100 | ||
| Sales | 802,000 | ||
| Cash paid for income tax | 90,000 | ||
| Cash received from customers | 566,800 | ||
| Cash received as proceeds from disposal of building | 202,100 | ||
| Cash paid for operating expenses | 84,000 | ||
| Cash paid to employees | 105,000 | ||
| Beginning cash balance | 11,000 | ||
| Cash paid to suppliers | 181,300 | ||
| Cash received from issuing common shares | 360,000 | ||
| Cash paid to redeem bonds at maturity | 240,000 | ||
| Cash paid to purchase equipment | 113,600 | ||
| Ending cash balance | 224,800 |
Prepare a statement of
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