Question: The following are selected balance sheet accounts of Zach Corporation

The following are selected balance sheet accounts of Zach Corporation at December 31, 2014 and 2013, as well as the increases or decreases in each account from 2013 to 2014. Also presented is selected income statement information for the year ended December 31, 2014, as well as additional information.

Selected Income Statement Information for the Year Ended
December 31, 2014
Sales revenue $155,000
Depreciation 33,000
Gain on sale of equipment 13,000
Net income 28,000

Additional Information:
• Accounts receivable relate to sales of merchandise.
• During 2014, equipment that cost $40,000 was sold for cash.
• During 2014, $20,000 of bonds payable were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium.

Items 1 through 5, which follow, represent activities that will be reported in Zach’s statement of cash flows for the year ended December 31, 2014. For each item, determine both the amount that should be reported in Zach’s 2014 statement of cash flows and the section (operating, investing, or financing) in which the item should appear.
1. Cash collections from customers (direct method)
2. Payments for the purchase of property, plant, and equipment
3. Proceeds from the sale of equipment
4. Cash dividends paid
5. Redemption of bondspayable
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  • CreatedSeptember 10, 2014
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