The Ladies Store presented the statement of cash flows for the year ended December 31, 2002, shown below.
|
THE LADIES STORE |
|
|
Cash received: |
|
|
From sales to customers |
$150,000 |
|
From sales of bonds |
100,000 |
|
From issuance of notes payable |
40,000 |
|
From interest on bonds |
5,000 |
|
Total cash received |
295,000 |
|
Cash payments: |
|
|
For merchandise purchases |
110,000 |
|
For purchase of truck |
20,000 |
|
For purchase of investment |
80,000 |
|
For purchase of equipment |
45,000 |
|
For interest |
2,000 |
|
For income taxes |
15,000 |
|
Total cash payments |
272,000 |
|
Net increase in cash |
$ 23,000 |
Note: Depreciation expense was $15,000.
Required a. Prepare a statement of cash flows in proper form.
b. Comment on the major flows of cash.