Question

Following are selected balance sheet accounts of Del Conte Corp. at December 31, 2021 and 2020, and the increases or decreases in each account from 2020 to 2021. Also presented is selected income statement information for the year ended December 31, 2021, and additional information.

Selected Balance Sheet Accounts	2021			2020			Increase (Decrease)
Assets
Accounts receivable	$	50,000		$	32,000		$	18,000
Property, plant, and equipment		293,000			255,000			38,000
Accumulated depreciation		(194,000	)		(175,000	)		19,000
Liabilities and Stockholders’ Equity
Bonds payable		73,000			62,000			11,000
Dividends payable		12,000			8,200			3,800
Common stock, $1 par		38,000			27,000			11,000
Additional paid-in capital		13,000			6,200			6,800
Retained earnings		120,000			99,000			21,000
Selected Income Statement Information for the Year Ended December 31, 2021
Sales revenue	$	171,000
Depreciation		49,000
Gain on sale of equipment		17,000
Net income		44,000

Additional information:

1. Accounts receivable relate to sales of merchandise.
2. During 2021, equipment costing $56,000 was sold for cash.
3. During 2021, bonds payable with a face value of $36,000 were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium.

Required:
Items 1 through 5 represent activities that will be reported in Del Conte's statement of cash flows for the year ended December 31, 2021. The following two responses are required for each item:

1. Determine the amount that should be reported in Del Conte's 2021 statement of cash flows.
2. Select the category (i.e., O - Operating activity, I - Investing activity and F - Financing activity) in which the amount should be reported in the statement of cash flows.

1 Cash collections from customers (direct Method) Amount Category

2 Payments for purchases of property, plant, and equipment Amount Category

3 Proceeds from the sale of equipment Amount Category

4 Cash dividends paid amount category

5 Redemption of bonds payable Amount Category

Answer 1

1. Cash collections from customers - Operating Activity
= $171000 + 32000 - 50000 = $153000

2. Payments for purchases of property, plant, and equipment - Investing Activity
= $293000 - 255000 + 56000 = $94000 or ($94000)

3. Proceeds from the sale of equipment - Investing Activity
= $56000

4. Cash Dividends paid - Financing Activity
= $99000 + 44000 - 120000 + 8200 - 12000 = $19200 or ($19200)

5. Redemption of bonds payable - Financing Activity
= $62000 + 36000 - 73000 = $25000 or ($25000)