Skyler's Wine Company Uses the Direct Method to Prepare Its

question 61

Essay

Skyler's Wine Company uses the direct method to prepare its statement of cash flows.Refer to the following financial statement information for the year ending December 31,2017:


Additional information provided by the company includes the following:
Equipment costing $60,000 was purchased for cash.
Equipment with a net asset value of $10,000 was sold for $16,000.
During 2017,the company repaid $43,000 of long-term notes payable.
During 2017,the company borrowed $34,000 on a new note payable.
There were no stock retirements during the year.
There were no sales of Treasury Stock during the year.
Prepare a complete statement of cash flows using the direct method.
Accrued Liabilities relate to other operating expenses.

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Definitions:

Balance Sheet

The balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Telephone Expense

This represents the cost associated with telephone usage and services for a business, classified as an office expense.

Fees Earned

Fees earned refer to the income a company receives from providing services to its clients, typically recorded in the income statement.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net profit or loss.