The financial statements of Lewis Limited appear below: LEWIS LIMITED Comparative Statement of financial positions 31...

 

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The financial statements of Lewis Limited appear below: LEWIS LIMITED Comparative Statement of financial positions 31 December Assets Cash Accounts receivable Merchandise inventory Property, plant, and equipment Accumulated depreciation Total Liabilities and Equity Accounts payable Income taxes payable Notes payable Ordinary shares Retained earnings Total LEWIS LIMITED Income Statement for the year ended 31 December 2019 Sales Cost of sales Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Profit after income tax The following additional data were provided: 1. Dividends declared and paid were $14,000. 2019 $ 44,000 26,000 20,000 50,000 (20,000) $120,000 $ 15,000 13,000 7,000 41,000 44,000 $120,000 $20,000 16,000 2018 $ 23,000 34,000 15,000 78,000 (24,000) $126,000 $ 23,000 8,000 33,000 24,000 38,000 $126,000 $350,000 280,000 70,000 36,000 34,000 4,000 30,000 10,000 $20,000 2. During the year equipment was sold for $12,000 cash. This equipment cost $28,000 originally and had a carrying amount of $12,000 at the time of sale. 3. All depreciation expense is in the selling expense category. 4. All sales and purchases are on account. 5. Accounts payable pertain to merchandise suppliers. 6. All operating expenses except for depreciation were paid in cash. Required: Prepare a statement of cash flows for the year ended 31 December 2019 using the direct method. The financial statements of Lewis Limited appear below: LEWIS LIMITED Comparative Statement of financial positions 31 December Assets Cash Accounts receivable Merchandise inventory Property, plant, and equipment Accumulated depreciation Total Liabilities and Equity Accounts payable Income taxes payable Notes payable Ordinary shares Retained earnings Total LEWIS LIMITED Income Statement for the year ended 31 December 2019 Sales Cost of sales Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Profit after income tax The following additional data were provided: 1. Dividends declared and paid were $14,000. 2019 $ 44,000 26,000 20,000 50,000 (20,000) $120,000 $ 15,000 13,000 7,000 41,000 44,000 $120,000 $20,000 16,000 2018 $ 23,000 34,000 15,000 78,000 (24,000) $126,000 $ 23,000 8,000 33,000 24,000 38,000 $126,000 $350,000 280,000 70,000 36,000 34,000 4,000 30,000 10,000 $20,000 2. During the year equipment was sold for $12,000 cash. This equipment cost $28,000 originally and had a carrying amount of $12,000 at the time of sale. 3. All depreciation expense is in the selling expense category. 4. All sales and purchases are on account. 5. Accounts payable pertain to merchandise suppliers. 6. All operating expenses except for depreciation were paid in cash. Required: Prepare a statement of cash flows for the year ended 31 December 2019 using the direct method.

Answer rating: 100% (QA)

Solution Statement of Cash Flows Direct Method wwwexcelskillscom Amount Cash flows from operating ac... View the full answer