Question

The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Thomas Corporation for calendar year 2015.

Cash
Balance, Dec. 31, 2014 $212,900
Receipts from customers 9,367,600 Payments for inventory $2,482,414
Receipts from dividends 3,278,660 Payments for wages 861,819
Receipts from land sale 3,466,012 Payments for rent 496,483
Receipts from machinery sale 1,105,377 Payments for interest 337,234
Receipts from issuing stock 2,407,473 Payments for taxes 702,570
Receipts from borrowing 4,056,171 Payments for machinery 3,494,115
Payments for long-term investments3,531,585
Payments for note payable 599,526
Payments for dividends 777,511
Payments for treasury stock 337,234
Balance, Dec. 31, 2015 $
Required:
Use this information to prepare a complete statement of cash flows for year 2015. The cash provided or used by operating activities should be reported using the direct method.

Answer 1

Thomas Corporation

Statement of Cash Flows for the year ended December 31, 2015:

Operating Activities:

Receipts from customers $9,367,600

Receipts from dividends 3,278,660

Payments for inventory (2,482,414)

Payments for wages (861,819)

Payments for rent (496,483)

Payments for interest (337,234)

Payments for taxes (702,570)

Net cash from operations $7,765,740

Investing Activities:

Receipts from land sale $3,466,012

Receipts from machinery sale 1,105,377

Payments for machinery (3,494,115)

Payments for long-term investments (3,531,585)

Net cash from investments ($2,454,311)

Financing Activities:

Receipts from issuing stock $2,407,473

Receipts from borrowing 4,056,171

Payments for note payable (599,526)

Payments for dividends (777,511)

Payments for treasury stock (337,234)

Net cash from financing $4,749,373

Net cash flows $10,060,802

Step-by-step explanation:

a) Data and Calculations:

Cash

Balance, Dec. 31, 2014 $212,900

Receipts from customers $9,367,600

Receipts from dividends 3,278,660

Receipts from land sale 3,466,012

Receipts from machinery sale 1,105,377

Receipts from issuing stock 2,407,473

Receipts from borrowing 4,056,171

Total receipts $23,681,293

Payments for inventory $2,482,414

Payments for wages 861,819

Payments for rent 496,483

Payments for interest 337,234

Payments for taxes 702,570

Payments for machinery 3,494,115

Payments for long-term investments 3,531,585

Payments for note payable 599,526

Payments for dividends 777,511

Payments for treasury stock 337,234

Total payment $13,620,491

Balance, Dec. 31, 2015 $10,273,702 ($212,900 + 23,681,293 - 13,620,491)

Classification of receipts and payments:

Operating Activities

Receipts from customers $9,367,600

Receipts from dividends 3,278,660

Payments for inventory (2,482,414)

Payments for wages (861,819)

Payments for rent (496,483)

Payments for interest (337,234)

Payments for taxes (702,570)

Net cash from operations $7,765,740

Investing Activities

Receipts from land sale $3,466,012

Receipts from machinery sale 1,105,377

Payments for machinery (3,494,115)

Payments for long-term investments (3,531,585)

Net cash from investments ($2,454,311)

Financing Activities

Receipts from issuing stock $2,407,473

Receipts from borrowing 4,056,171

Payments for note payable (599,526)

Payments for dividends (777,511)

Payments for treasury stock (337,234)

Net cash from financing $4,749,373

Net cash flows $10,060,802

Cash Reconciliation:

Beginning Cash Balance $212,900

Net cash flows 10,060,802

Ending Cash balance $10,273,702