The Financial Statements of Lowz Company Appear Below

question 170

Essay

The financial statements of Lowz Company appear below: The following additional data were provided:
1. Dividends declared and paid were $35,000.
2. During the year, equipment was sold for $17,000 cash. This equipment cost $28,000 originally and had a book value of $17,000 at the time of sale.
3. All depreciation expense is in the operating expenses.
4. All sales and purchases are on account.
5. Accounts payable pertain to merchandise suppliers.
6. All operating expenses except for depreciation were paid in cash.
Instructions
Prepare a statement of cash flows for Lowz Company using the direct method.

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Definitions:

Consumer Product Safety Act

A federal law in the United States that was enacted to protect consumers against unreasonable risks of injuries and deaths associated with consumer products.

Product Safety

The assurance that products will not cause harm to consumers or users when used as intended.

Mandatory Standards

Regulations that set specific requirements for the quality, performance, or safety of products or services, and must be followed by manufacturers or service providers.

Fair and Accurate Credit Transactions Act

A federal law enacted to enhance consumer protection against identity theft and to improve the accuracy of consumer records.