The accounting staff of Harris Company has assembled the following information for the year ended December 31, 2011:

Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 800,000

Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000

Collections on accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200,000

Cash transferred from the money market fund to the general bank

account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000

Interest and dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000

Purchases (all on account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000

Payments on accounts payable to merchandise suppliers. . . . . . . . . . . . . . . . . . 1,500,000

Cash payments for operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050,000

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000

Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000

Loans made to borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000

Collections on loans (excluding receipts of interest) . . . . . . . . . . . . . . . . . . . . . . 260,000

Cash paid to acquire plant assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,100,000

Book value of plant assets sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660,000

Loss on sales of plant assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Proceeds from issuing bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000

Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000

Cash and cash equivalents, Jan. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 489,000

Instructions

Prepare a statement of cash flows in the format illustrated in Exhibit 13–1. Place brackets around amounts representing cash outflows. Use the direct method of reporting cash flows from operating activities.

Some of the items above will be listed in your statement without change. However, you will have to combine certain given information to compute the amounts of

(1) Collections from customers,

(2) Cash paid to suppliers and employees, and

(3) Proceeds from sales of plant assets.

Transcribed Image Text:

Exhibit 13-1 ALLISON CORPORATION STATEMENT OF CASH FLOWS ALLISON CORPORATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011 Cash flows from operating activities Cash received from customers Interest and dividends received .$ 870,000 10,000 Cash provided by operating activities Cash paid to suppliers and employees Interest paid... Income taxes paid $880,000 $(764,000) .(28,000) 38,000 Cash disbursed for operating activities (830,000) 50,000 Net cash flows from operating activities . . . . . . .. Cash flows from investing activities Purchases of marketable securities Proceeds from sales of marketable securities ··· Loans made to borrowers Collections on loans Purchases of plant assets Proceeds from sales of plant assets (65,000) 40,000 (17,000) 12,000 (160,000) 75,000 Net cash flows from investing activities Cash flows from financing activities (115,000) Proceeds from short-term borrowing Payments to settle short-term debts. Proceeds from issuing bonds payable Proceeds from issuing capital stock Dividends paid 45,000 (55,000) 100,000 50,000 0,000 Net cash flows from financing activities . . 100,000 35,000 20,000 $55,000 Cash and cash equivalents, Jan. 1, 2011. Cash and cash equivalents, Dec. 31, 2011