The Following Data Pertains to Joss Decorating for the Year

question 128

Essay

The following data pertains to Joss Decorating for the year of 2012:
a.Salaries and wages: accrued,$175,000; paid in cash $200,000.
b.Depreciation,$50,000.
c.Interest expense,all paid in cash,$12,500.
d.Other expenses,all paid in cash,$112,000.
e.Income taxes accrued,$35,000; income taxes paid in cash,$33,000.
f.Bought plant and facilities for $365,000 cash.
g.Sales of $1,500,000,all on credit.Cash collections from customers,$1,250,000.
h.The cost of items sold was $750,000.Purchases of inventory totaled $825,000; inventory and accounts payable were affected accordingly.
i.Cash payments on trade accounts payable were $700,000.
j.Issued long-term debt for $110,000 cash.
k.Paid cash dividends of $45,000.
Prepare a statement of cash flows using the direct method for reporting cash flows from operating activities.Omit supporting schedules.

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Definitions:

Internal Controls

Processes put in place by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

NSF Check

A check that cannot be processed due to insufficient funds in the account it's drawn against; stands for "Non-Sufficient Funds."

Bank Reconciliation

A bank reconciliation is a process that explains the difference between the bank balance shown in an organization's bank statement and the corresponding amount shown in the organization's own accounting records.

Credit Memo

A document issued by a seller that reduces the amount a buyer owes, typically related to returns or adjustments.