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

question 29

Essay

Use the following calendar-year information to prepare David Company's statement of cash flows using the direct method.You may omit the schedule reconciling net income and net cash provided or used by operating activities.
$$\begin{array} { | l | r | } \hline \text { Cash paid to purchase machinery } & \$ 124 _ { 2 } 000 \\\hline \text { Cash paid for merchardise irventory } & 220,000 \\\hline \text { Cash paid for operatirre expenses } & 280,000 \\\hline \text { Cash paid for interest } & 4,000 \\\hline \text { Cash received for interest } & 10,000 \\\hline \text { Cash proceeds from sale of land } & 100,000 \\\hline \text { Cash balance at begirning of year } & 15,000 \\\hline \text { Cash balance at end of year } & 77,000 \\\hline \text { Cash borrowed on a short-ternn note } & 25,000 \\\hline \text { Cash dividends paid } & 24,000 \\\hline \text { Cash received from stock issuarice } & 57,000 \\\hline \text { Cash collections from customers } & 522,000 \\\hline\end{array}$$

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Definitions:

Sales Level

The total volume or quantity of sales achieved by a business within a specific period.

Income Change

Income change refers to any variation, either an increase or decrease, in the amount of revenue or profit that an entity receives over a period.

Variable Costing

An approach to costing that accounts for only variable production expenses, including direct materials, direct labor, and variable manufacturing overhead, in the calculation of product costs.

Absorption Costing

A costing approach that consolidates every expense related to manufacturing - direct materials, direct labor, and both variable and fixed overheads - into the product’s price.