Comparative balance sheets and the income statements for Ellis Corporation are presented below: The following additional information is available for the year:
* During the year, the company sold long-term investments for $35,500 that had been purchased for $38,000.
* The company did not sell any property, plant, and equipment during the year or repurchase any of its own common stock.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company paid cash to retire $15,000 of bonds payable.
Required:
a. Using the indirect method, determine the net cash provided by operating activities.
b. Using the direct method, determine the net cash provided by operating activities.
c. Using the net cash provided by operating activities amount from either part a or b, prepare a statement of cash flows.

Question

Comparative balance sheets and the income statements for Ellis Corporation are presented below:   The following additional information is available for the year:
* During the year, the company sold long-term investments for $35,500 that had been purchased for $38,000.
* The company did not sell any property, plant, and equipment during the year or repurchase any of its own common stock.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company paid cash to retire $15,000 of bonds payable.
Required:
a. Using the indirect method, determine the net cash provided by operating activities.
b. Using the direct method, determine the net cash provided by operating activities.
c. Using the net cash provided by operating activities amount from either part a or b, prepare a statement of cash flows.

Quizplus · Accepted Answer

The Answer of Comparative balance sheets and the income statements for Ellis Corporation are presented below:   The following additional information is available for the year:
* During the year, the company sold long-term investments for $35,500 that had been purchased for $38,000.
* The company did not sell any property, plant, and equipment during the year or repurchase any of its own common stock.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company paid cash to retire $15,000 of bonds payable.
Required:
a. Using the indirect method, determine the net cash provided by operating activities.
b. Using the direct method, determine the net cash provided by operating activities.
c. Using the net cash provided by operating activities amount from either part a or b, prepare a statement of cash flows.

Comparative Balance Sheets and the Income Statements for Ellis Corporation