accounting-Following is an incorrectly prepared statement of cash flows

QUESTION

Following is an incorrectly prepared statement of cash flows for
Herman Corporation. Review and correct
this presentation, using a direct approach.

HERMAN CORPORATION

Statement of Cash Flows

For the Year Ending December 31, 20X2

Cash balance at January
1, 20X2

$ 175,000

Cash receipts during
20X2

Sale of building
$ 800,000

Dividend received on
investments
10,000

Cash received from
customers
2,350,000

Proceeds from issuing
stock
1,400,000
4,560,000

Cash payments during
20X2

Purchase of
inventory
$ 760,000

Interest on loans
56,000

Income taxes
124,000

Repayment of long-term
note payable
2,000,000

Purchase of
equipment
435,000

Selling and
administrative expenses
696,000

Dividends on
common
175,000
(4,246,000)

Cash balance at
December 31, 20X2

$ 489,000

———————————————————————————–

Noncash
investing/financing activities:

Bought land by issuing
promissory note payable

$ 450,000

HERMAN CORPORATION

Statement of Cash Flows

For the Year Ending December 31, 20X2

ANSWER:

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