Use the Following Information About the Calendar-Year Cash Flows of MacArthur

question 40

Essay

Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.
$$\begin{array} { | l | r | } \hline \text { Cash and cash equivalents, begirning-year balarice } & \$ 18,000 \\\hline \text { Cash and cash equivalents, year-end balance } & 78,750 \\\hline \text { Cash payments for merchandise irventory } & 75,750 \\\hline \text { Cash paid for store equipment } & 15,750 \\\hline \text { Cash borrowed on three-month note payable } & 22,500 \\\hline \text { Cash dividends paid } & 12,000 \\\hline \text { Cash paid for salaries } & 39,000 \\\hline \text { Cash payments for other operating expenses } & 48,000 \\\hline \text { Building purchased and finariced by lone-term note payable } & 78,000 \\\hline \text { Cash received from customers } & 220,500 \\\hline \text { Cash interest received } & { 8 , 2 5 0 } \\\hline\end{array}$$

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Definitions:

Financial Statements

Periodic reports published by a company for the purpose of providing information about its financial status and performance to external parties.

Fairness

The quality of making judgments that are free from discrimination, dishonesty, or injustice.

Statement of Cash Flows

A financial report that consolidates information about all cash received and expended by a business.

Cash Receipts

The collection of money, such as income from sales or assets being liquidated, recorded during an accounting period.