Use the Following Calendar-Year Information to Prepare Adam Company's Statement

question 72

Essay

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.
$$\begin{array} { | l | r | } \hline \text { Cash paid to purchase machinery } & \$ 124,000 \\\hline \text { Cash paid for merchandise inventory } & 220,000 \\\hline \text { Cash paid for operating expenses } & 280,000 \\\hline \text { Cash paid for interest } &4,000 \\\hline \text { Cash received for interest } & 10,000 \\\hline \text { Cash proceeds from sale of land } &100,000 \\\hline \text { Cash balance at beginning of year } & 15,000 \\\hline \text { Cash balance at end of year } & 77,000\\\hline \text { Cash borrowed on a short-term note } & 25,000 \\\hline \text { Cash dividends paid } & 24,000 \\\hline \text { Cash received from stock issuance } &57,000 \\\hline \text { Cash collections from customers } & 522,000 \\\hline\end{array}$$

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Definitions:

Product Liability Lawsuit

A legal claim brought against a manufacturer, distributor, or seller for damages or injuries caused by a defective or dangerous product.

Defective

Pertaining to a product or good that fails to meet quality standards or is unfit for its intended use due to flaws or errors.

Defendant's Control

The extent to which a defendant has the ability or power to manage, direct, or influence events or outcomes in a legal case.

Market Share Theory

Product liability theory which holds that when it is impossible to identify the manufacturer of a particular product that caused harm, the plaintiff may sue all manufacturers of the product, with liability apportioned among them on the basis of each one’s market share.