The Following Information Was Obtained from the Champion Company for the Year

question 180

Essay

The following information was obtained from the Champion Company for the year ending December 31, 20__.
Using the direct method, prepare a statement of cash flows.
$\begin{array}{|l|c|}\hline \text { Cash paid to suppliers } & \$ 289,000 \\\hline \text { Capital stock issued } & \$ 81,000 \\\hline \text { Equipment purchased } & \$ 58,000 \\\hline \text { Interest paid } & \$ 10,500 \\\hline \text { Cash received from customers } & \$ 936,000 \\\hline \text { Taxes paid } & \$ 28,000 \\\hline \text { Proceeds from long-term } & \\\hline \text { Borrowing } & \$ 116,000 \\\hline \text { Collections of loans made } & \$ 17,000 \\\hline \text { Interest received } & \$ 16,000 \\\hline \text { Proceeds from sale of equipment } & \$ 24,000 \\\hline \text { Dividends paid } & \$ 4,600 \\\hline \text { Loans made to borrowers } & \$ 29,000 \\\hline \text { Cash on hand } 1 / 01 / 20 & \$ 1,781,000 \\\hline \text { Cash on hand } 12 / 31 / 20 & \$ 2,551,900 \\\hline\end{array}$

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Definitions:

Variable Factory Overhead

Expenses in a factory operation that vary with production volume, such as utilities or raw materials.

Direct Labor

The wages or salaries paid to workers directly involved in the production of goods or services.