The 2019 accounting records of Pape Transport reveal these transactions and events. | ||||||
Payment of interest | $74,924 | Payment of salaries and wages | $397,098 | |||
Cash sales | 359,636 | Depreciation expense - vehicles | 119,879 | |||
Receipt of dividend revenue | 134,863 | Proceeds from sale of vehicles | 6,083,839 | |||
Payment of income tax | 89,909 | Purchase of vehicles for cash | 164,833 | |||
Profit | 284,712 | Loss on sale of vehicles | 22,477 | |||
Payments for inventory | 726,764 | Payment of operating expenses | 209,788 | |||
Payment for land | 554,438 | Retained earnings at the start of the year | 507,500 | |||
Collection of accounts receivable | 1,461,020 | Retained earnings at the end of the year | 531,100 | |||
Required | ||||||
a) Prepare the cash flows from operating activities section for the year ended 31 December 2019 using the direct method. | ||||||
b) How much was the payment of dividends? | ||||||
c) During the year equipment was sold, and the company recorded a profit on sale of equipment in the income statement of $5,000. | ||||||
This equipment cost $49,500 originally and had a carrying amount of $14,800 at the time of sale. | ||||||
What were the proceeds from the sale of the equipment? |
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