Question

Condensed financial data of Swifty Company for 2017 and 2016 are presented below.

SWIFTY COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		2017			2016
Cash		$1,830			$1,140
Receivables		1,720			1,280
Inventory		1,610			1,900
Plant assets		1,870			1,690
Accumulated depreciation		(1,210)			(1,190)
Long-term investments (held-to-maturity)		1,270			1,410
		$7,090			$6,230
Accounts payable		$1,230			$910
Accrued liabilities		200			250
Bonds payable		1,410			1,540
Common stock		1,880			1,710
Retained earnings		2,370			1,820
		$7,090			$6,230

SWIFTY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue		$6,880
Cost of goods sold		4,680
Gross margin		2,200
Selling and administrative expenses		930
Income from operations		1,270
Other revenues and gains
Gain on sale of investments		80
Income before tax		1,350
Income tax expense		540
Net income		810
Cash dividends		260
Income retained in business		$550

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Statement of Cash flows.
Cash flows from Operating activities:
Cash receivevd from Accounts receivable(6880+1280-1720)						6440
Cash paid for inventory (4680+1610-1900+910-1230-20)						-4050
Selling and admin expense paid (930+250-200)						-980
Income tax paid						-540
Net cash provided from operating activities							870
Cash flows from Investing activities:
Sale of investment						220
Purchase of equipment						-110
Net cash provided from Investing activities							110
Cash flows from Financing activities:
Repayment of Bonds						-130
Issue of common Stock						100
Dividend paid						-260
Net cash used in financing activities							-290
Net increase in Cash							690
Beginning balance of cash							1140
Ending balance of cash							1830