The 2024 income statement and comparative balance sheet of CanGrow, Inc. follow:
DATA:
CanGrow, Inc.
Income Statement
Year Ended December 31, 2024
Net Sales Revenue = $441,000
Cost of Goods Sold = 204,200
Gross Profit = 236,800
Operating Expenses:
Salaries Expense = $79,400
Depreciation ExpensePlant Assets = 14,800
Other Operating Expenses = 10,100
Total Operating Expenses = 104,300
Operating Income = 132,500
Other Income and (Expenses):
Interest Revenue = 8,500
Interest Expense = (21,700)
Total Other Income and (Expenses) = (13,200)
Net Income Before Income Taxes = 119,300
Income Tax Expense = 19,400
Net Income = $99,900
MORE DATA:
CanGrow, Inc.
Comparative Balance Sheet
December 31, 2024 and 2023
Assets:
Current Assets:
2024 Cash = 26,500
2023 Cash = 15,900
2024 Accounts Receivable = 26,700
2023 Accounts Receivable = 25,000
2024 Merchandise Inventory = 79,400
2023 Merchandise Inventory = 92,000
Long-term Assets:
2024 Land = 35,400
2023 Land = 9,000
2024 Plant Assets = 115,070
2023 Plant Assets = 110,310
2024 Accumulated Depreciation - Plant Assets = (17,170)
2023 Accumulated Depreciation - Plant Assets = (15,610)
2024 Total Assets = 265,900
2023 Total Assets = 236,600
Liabilities:
Current liabilities:
2024 Accounts Payable = 35,200
2023 Accounts Payable = 29,900
Long-term liabilities:
2024 Notes Payable = 72,000
2023 Notes Payable = 102,000
2024 Total Liabilities = 136,100
2023 Total Liabilities = 162,000
Stockholders' Equity :
2024 Common Stock, no par = 88,500
2023 Common Stock, no par = 64,100
2024 Retained Earnings = 41,300
2023 Retained Earnings = 10,500
2024 Total Stockholders' Equity = 129,800
2023 TotalStockholders' Equity = 74,600
2024 Total Liabilities and Stockholders' Equity = 265,900
2023 Total Liabilities and Stockholders' Equity = 236,600
MORE INFO:
Additionally, CanGrow purchased land of $ 26,400 by financing it 100% with long-term notes payable during 2024. During the year, there were no sales of land, no retirements of stock, and no treasury stock transactions. A plant asset was disposed of for $0. The cost and accumulated depreciation of the disposed asset was $ 13,240. The plant acquisition was for cash.
Prepare the 2024 Statement of Cash Flows by the direct method. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.)
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Statement of Cash Flows (Direct Method) for CanGrow, Inc. - Year Ended December 31, 2024
Statement of Cash Flows (Direct Method) for CanGrow, Inc. - Year Ended December 31, 2024
Operating Activities:
Cash Receipts from Customers:
Net Sales Revenue = $441,000
Add: Decrease in Accounts Receivable
(26,700 - 25,000) = $1,700
Total Cash Receipts = $442,700
Cash Payments to Suppliers and Employees:
Cost of Goods Sold = $204,200
Add: Decrease in Merchandise Inventory
(79,400 - 92,000) = $(12,600)
Total Cash Payments for Inventory = $216,800
Operating Expenses:
Salaries Expense = $79,400
Depreciation Expense = $14,800
Other Operating Expenses = $10,100
Total Cash Operating Expenses = $104,300
Net Cash Provided by Operating Activities = $121,600
Investing Activities:
Purchase of Plant Assets (for cash) = $(115,070)
Proceeds from Disposal of Plant Asset = $0
Net Cash Used in Investing Activities = $(115,070)
Financing Activities:
Proceeds from Notes Payable = $72,000
Repayment of Notes Payable = $(30,000) ($102,000 - $72,000)
Net Cash Provided by Financing Activities = $42,000
Net Increase in Cash:
Cash at Beginning of Year (2023) = $15,900
Plus: Net Increase in Cash during 2024 = $26,500 - $15,900 = $10,600
Cash at End of Year (2024):
Cash at Beginning of Year (2023) + Net Increase in Cash during 2024 = $15,900 + $10,600 = $26,500
Summary:
Net Increase in Cash from Operating Activities = $121,600
Net Cash Used in Investing Activities = $(115,070)
Net Cash Provided by Financing Activities = $42,000
Net Increase in Cash for the Year = $48,530
The above Statement of Cash Flows for CanGrow, Inc. provides a breakdown of the company's cash flows from operating, investing, and financing activities for the year ended December 31, 2024. This direct method statement illustrates how cash has been generated and utilized throughout the year, resulting in a net increase in cash of $48,530.
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