Question: The income statement and additional data of Quik Shop Inc

The income statement and additional data of Quik Shop, Inc., follow:

Additional data:
a. Collections from customers are $30,000 more than sales.
b. Payments to suppliers are $1,200 less than the sum of cost of goods sold plus advertising expense.
c. Payments to employees are $1,800 less than salary expense.
d. Dividend revenue, interest expense, and income tax expense equal their cash amounts.
e. Acquisition of plant assets is $208,000. Of this amount, $133,000 is paid in cash and $75,000 by signing a long-term note payable.
f. Proceeds from sale of land total $28,000.
g. Proceeds from issuance of common stock total $33,000.
h. Payment of a long-term note payable is $13,000.
i. Payment of dividends is $8,000.
j. Cash balance, June 30, 2013, was $12,400.

1. Prepare Quik Shop, Inc.’s statement of cash flows and accompanying schedule of noncash investing and financing activities. Report operating activities by the direct method.
2. Evaluate Quik Shop’s cash flows for the year. In your evaluation, mention all three categories of cash flows and give the reason for yourevaluation.

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  • CreatedJuly 25, 2014
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