Answer:
<u>Statement of cash flows (direct method) for the year ended December 31, 2017</u>
Cash flow from Operating Activities
Cash received from customers 495,000
Cash paid to Suppliers and Employees(20,000 + 76,500) -96,500
Net Cash from Operating Activities 398,500
Cash flow from Investing Activities
Interest Received 3,500
Proceeds from Sale of Equipment 60,250
Purchase of Store Equipment -24,750
Net Cash from Investing Activities -39,000
Cash flow from Financing Activities
Repurchase of Notes Payable -100,000
Dividends Paid -10,000
Net Cash from Financing Activities -110,000
Movement During the Year 108,000
Cash and Cash Equivalents at Beginning of the Year 40,000
Cash and Cash Equivalents at End of the Year 148,000
Explanation:
Cash flow Statements include only those items that involve movement of Cash. Therefore, ignore non-cash items.
Note also that, the direct method is required for this question. Therefore, stick to the required method and ignore an cash related to Working Capital items (<em>as this is dealt with in indirect method</em>)
