Problem 14-20A (Algo) Using transaction data to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4

Stuart Company engaged in the following transactions for Year 1. The beginning cash balance was $28,400 and the ending cash balance was $79,066.

1. Sales on account were $283,800. The beginning receivables balance was $93,900 and the ending balance was $77,900.

2. Salaries expense for the period was $53,280. The beginning salaries payable balance was $3,080 and the ending balance was $1,760.

3. Other operating expenses for the period were $120,600. The beginning other operating expenses payable balance was $4,980 and the ending balance was $9,407.

4. Recorded $19,200 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $14,420 and $33,620, respectively.

5. The Equipment account had beginning and ending balances of $211,940 and $240,840, respectively. There were no sales of equipment during the period.

6. The beginning and ending balances in the Notes Payable account were $48,900 and $147,400, respectively. There were no payoffs of notes during the period.

7. There was $6,393 of interest expense reported on the income statement. The beginning and ending balances in the Interest Payable account were $1,502 and $1,001, respectively.

8. The beginning and ending Merchandise Inventory account balances were $86,710 and $104,052, respectively. The company sold merchandise with a cost of $151,155 (cost of goods sold for the period was $151,155). The beginning and ending balances in the Accounts Payable account were $9,240 and $11,180, respectively.

9. The beginning and ending balances in the Notes Receivable account were $4,600 and $9,500, respectively. Notes receivable result from long-term loans made to employees. There were no collections from employees during the period.

10. The beginning and ending balances in the Common Stock account were $96,000 and $117,000, respectively. The increase was caused by the issue of common stock for cash.

11. Land had beginning and ending balances of $46,500 and $33,635, respectively. Land that cost $12,865 was sold for $9,490, resulting in a loss of $3,375.

12. The tax expense for the period was $7,420. The Taxes Payable account had a $1,010 beginning balance and a $930 ending balance.

13. The Investments account had beginning and ending balances of $26,500 and $32,100, respectively. The company purchased investments for $18,600 cash during the period, and investments that cost $13,000 were sold for $26,000, resulting in a $7,400 gain.

Required

1. Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Stuart Company uses the direct method for showing net cash flow from operating activities.

2. Prepare a statement of cash flows using the direct method.

Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of cash flow for each item and indicate whether the item should appear in the operating, investing, or financing activities section of a statement of cash flows. Assume Stuart Company uses the direct method for showing net cash flow from operating activities. (Any cash outflow should be indicated by a minus sign. Select "No effect" if there is no effect | (i.e., zero variance).) Amount Statement of cash flows 2. 5. Transactions in Accounts receivable account in Salaries payable account in Other operating expenses payable in Depreciation expense in Equipment account in Notes payable account in Interest payable account in Accounts payable in Notes receivable in Common stock account in Land account in Taxes payable account in Investments account 7. 10. 11. 12. 13 Statement of Cash Flows For the Year Ended December 31, Year 1 Cash Flows From Operating Activities: Cash Receipts from Total cash inflows Cash Payments for: Total cash outflows Cash Flows from Investing Activities: Cash Flows from Financing Activities: Ending cash balance