Question: (SCF—Direct Method) Data for Pat Metheny Company are presented in E23-11.

Instructions

Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

Particular

Amount $

Cash receipts from customers

$6,450

Less: Cash payments

Cash paid for the merchandise

(4,100)

Selling and administrative expenses

(950)

Cash paid for income taxes

(540)

Cash flow from operating activities

$860

Investing activities:

Purchase of plant assets

(130)

Sale of held to maturity security

200

Cash flow from investing activities (B)

$70

Financing Activity:

Cash dividend

(260)

Redemption of bonds

(150)

Issuance of capital $\left(\$1,900-\$1,700-\$70\right)$

130

Cash used in financing activities (C)

($280)

The net change in a cash balance

$650

Add: Opening cash balance

$1,150

Closing cash balance (2017 balance)

$1,800

Non-cash significant financing and investing activity

Issue of common stock against the acquisition of plant

$70

Particular

Amount $

Sales

$6,900

Less: increase in accounts receivables

(450)

Cash receipts from customers

$6,450

Particular

Amount $

Cost of goods sold

$4,700

Less: Decrease in inventory

(300)

Less: Increase in account payable

(300)

Cash paid for merchandise

$4,100

Particular

Amount $

Selling and administrative expenses

$930

Less: Depreciation expenses

(30)

Add: Decrease in accrued liabilities

50

Selling and administrative expenses

$950