Question

111, Cash Flow Statement-direct method (25%) In order to prepare the statement of cash flows for Royal Corporation for 2018, the accountant has compiled the following data regarding cash flows: $48,000 $75,000 $19,500 $18,000 43,500 $27,000 $31,500 $36,000 $681,000 $531,000 $118,500 $201,000 $58,500 73,500 hases of marketable securities roceeds from sales of marketable securities nterest and dividends received nterest paid axes paid vidends paid roceeds from short-term borrowing ayments to settle short-term debts (principal repaid) h received from customers Proceeds from issuing capital stock roceeds from sales of plant assets Cash paid to suppliers and employees urchases of plant assets h and cash equivalents, beginning of year On the basis Corporation, showing the computation of net cash flows from operating activities by the direct method. of the above information, prepare a complete statement of cash flows for Royal

in order to prepare the statement of cash flows for royal corporation for 2018 direct method

Answer 1

Requirement, as asked

Statement of Cash flows - Direct Method
for year ended 31 Dec 2018
Cash flows from Operating Activities:
Cash received from customers	$681,000
Cash paid to suppliers and employees	($531,000)
Interest paid	($18,000)
Taxes paid	($43,500)
Net Cash flows from Operating activities		$88,500
Cash flows from Investing activities:
Purchase of Plant Assets	($201,000)
Proceeds from sale of plant assets	$58,500
Purchase of marketable securities	($48,000)
Proceeds from sale of marketable securities	$75,000
Interest and dividends received	$19,500
Net Cash flows from Investing activities		($96,000)
Cash flow from Financing Activities:
Dividends paid	($27,000)
Proceeds from issuing capital stock	$118,500
Proceeds from short term borrowings	$31,500
Payments to settle short term debts (principal)	($36,000)
Net Cash flows from Financing activities		$87,000
Net Increase (decrease) in Cash		$79,500
Cash & Cash equivalent - Beginning balance		$73,500
Cash & Cash equivalent - Ending balance		$153,000