Question

The accounting staff of Lambert Company has assembled the following information for the year ended December 31 of the current year. $ 866,000 2,500,000 2,205,000 Cash sales Credit sales Collections on accounts receivable Cash transferred from the money market fund to the general bank account Interest and dividends received Purchases (all on account) Payments on accounts payable to merchandise suppliers Cash payments for operating expenses Interest paid Income taxes paid Loans made to borrowers Collections on loans (excluding receipts of interest) Cash paid to acquire plant assets Book value of plant assets sold Loss on sales of plant assets Proceeds from issuing bonds payable Dividends paid Cash and cash equivalents, Jan. 1 250,000 100,000 1,800,000 1,550,000 1,045,000 180,000 95,000 500,000 260,000 3,100,000 653,500 82,700 2,500,000 120,000 512,000 Required: a. Prepare a statement of cash flows. Use the direct method of reporting cash flows from operating activities, b.1. Compute the amount of collections from customers. b-2. Compute the amount of cash paid to suppliers and employees. b.3. Compute the amount of proceeds from sales of plant assets. Complete this question by entering your answers in the tabs below.

Answer 1

Statement of cash flows
For the year ending December 31,
Particulars	Amount	Amount
Cash Sales	$866,000
Add: Collection on accounts receivable	$2,205,000
Cash Received from customer		$3,071,000
Interest and dividend received		$100,000
Cash provided from operating activities		$3,171,000
Cash paid from operating activities
Cash paid to suppliers and employees	$1,550,000
Cash payments for operating expenses	$1,045,000
Interest paid	$180,000
Income tax paid	$95,000
Cash disbursement from operating activities		-$2,870,000
Net Cash Flows from operating activities (A)		$301,000
Cash flows from Investing activities
Proceeds from sale of plant	$570,800
Purchase of plant assets	-$3,100,000
Loans made to borrowers	-$500,000
Collection on loans	$260,000
Net cash provided by investing activities (B)		-$2,769,200
Cash Flows from Financing activities
Proceeds from issuing bonds payable	$2,500,000
Dividends paid	-$120,000
Net cash provided by financing activities (C )		$2,380,000
Net increase in cash (A + B + C)		-$88,200
Cash and Cash Equivalent, Jan 1,		$512,000
Cash transfer from money market fund to general bank account		$250,000
Cash and Cash Equivalent, Dec 31		$673,800

b.1	Collection from Customer
	Particular's	Amount
	Cash Sale	$866,000
	Collection on accounts receivable	$2,205,000
	Cash Received from customer	$3,071,000
b.2	Cash paid to suppliers and employees
	Particular's	Amount
	Payments on accounts payable to merchandise suppliers	$1,550,000
	Cash Payments for Operating expenses	$1,045,000
	Cash paid to suppliers and employees	$2,595,000
b.3	Proceed from sale of plant assets
	Particular's	Amount
	Book value of plant assets sold	$653,500
	Less: Loss on sale of plant assets	-$82,700
	Proceed from sale of plant assets	$570,800