ACT 3392 Troy University Cash Flow Statement Cash Flows from Operating Activities Paper

• ) G Company’s balance sheets and income statement follow:
• Cash $700,000 $2,043,000
  Accounts
  receivables, net 1,200,000 800,000
  Prepaid
  items 100,000 138,000
  Investments 0 412,000
  Plant
  assets 3,800,000 4,600,000
  Accumulated
  depreciation (1,000,000) (1,400,000)
  $4,800,000$6,593,000
  Short-term
  debt 200,000 750,000
  Accounts
  payable 100,000 100,000
  Accrued
  liabilities 300,170 88,000
  Cash
  dividends payable 100,000 105,000
  Bonds
  payable, net 298,830 496,000
  Common
  stock ($1 par value) 100,000 100,000
  Additional
  paid-in-capital, common stock 1,400,000 1,400,000
  Treasury
  stock (75,000) (95,000)
  Retained
  earnings 2,376,000 3,649,000$4,800,000$6,593,000
  Sales $19,000,000
  Operating expenses
  16,800,000
  Other income/gains/losses, net 18,406
  Interest expense 29,000
  Income before taxes 2,189,406
  Income tax expense 496,406
  Net income $1,693,000

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• On 01-01-19, G paid a $25,000 premium on a life insurance policy on G’s CEO. G is the beneficiary on the policy. The premium payment was for the period 01-01-19 to 12-31-19. G only has one of these policies.
• During 2019, G declared and paid cash dividends on its outstanding common stock.
• During 2019, G made a cash contribution to its defined-benefit pension plan.
• On G’s income statement, the “operating expenses” caption includes, but is not limited to, depreciation.
• G’s accounts payable account is used solely for inventory purchases made on a credit basis.
• G records adjusting journal entries only once a year as of year-end.
• G uses the direct method.
• G identifies its operating cash receipts as receipts from customers
• G separates its operating cash payments into:
  • Payments to suppliers for inventory
  • Payments for operating expenses (other than pension plan-related)
  • Payments for (contributions to) its pension plan
  • Payments for income taxes

Prepare a statement of cash flows (including any required disclosures) for G the year ended 12-31-19. Label your cash flow section activity answers as cash provided by OR cash used in. In your footnote reconciliation of net income to cash flows from operating activities, be specific in your reconciling items. Also, be sure to support your reconciling item amounts with journal entries and/or other supporting calculations that you deem appropriate.