Huggins Digital Services, Inc., has provided the following data from the company's records for the year just

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Huggins Digital Services, Inc., has provided the following data from the company's records for the year just ended December 31:
a. Collection of interest ............................................................................................. $ 5,700
b. Cash sales .......................................................................................................... $ 251,000
c. Credit sales ........................................................................................................ $ 677,500
d. Proceeds from sale of long-term investment ....................................................... $ 12,400
e. Gain on sale of investment .................................................................................... $ 2,900
f. Payments to suppliers ........................................................................................ $ 572,500
g. Cash payments to purchase plant assets ............................................................. $ 52,500
h. Depreciation expense .......................................................................................... $ 63,700
i. Salaries expense ................................................................................................... $ 77,200
j. Payment of short-term note payable by issuing common stock .......................... $ 71,800
k. Cost of goods sold ............................................................................................ $ 565,500
l. Proceeds from issuance of long-term note payable ............................................. $ 24,900
m. Income tax expense and payment ..................................................................... $ 38,400
n. Proceeds from issuance of common stock ......................................................... $ 22,000
o. Cash receipt of dividend revenue ........................................................................ $ 6,800
p. Interest revenue .................................................................................................... $ 5,800
q. Payment of cash dividends ................................................................................. $ 28,100
r. Collections of accounts receivable ..................................................................... $ 572,000
s. Amortization expense ............................................................................................. $ 3,300
t. Payments on long-term notes payable .................................................................. $ 43,500
u. Interest expense and payments ............................................................................. $ 12,900
v. Purchase of equipment by issuing common stock to seller................................... $ 17,200
w. Payment of salaries................................................................................................ $ 74,200
x. Proceeds from sale of plant assets......................................................................... $ 24,400
y. Loss on sale of plant assets...................................................................................... $ 3,500
z. Cash and cash equivalents balance, beginning of year.......................................... $ 25,100
Requirements
1. Prepare the statement of cash flows for Huggins Digital Services, Inc., using the direct method for cash flows from operations. Note that you will need to calculate the ending balance of cash and cash equivalents. Include a schedule of noncash investing and financing activities.
2. Evaluate the company's cash flows for the year. Discuss each of the categories of cash flows in your response.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Managerial Accounting

ISBN: 978-0134128528

5th edition

Authors: Karen W. Braun, Wendy M. Tietz

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