Statement of Cash Flows: Direct Method

Lowry Locomotion
Statement of Cash Flows
for the year ended 12/31/x1
Cash
Cash
Cash
Cash
Cash

flows from operating activities

receipts from customers
paid to suppliers
paid to employees
generated from operations

Interest paid
Income taxes paid
Net cash from operating activities
$2,790,000
Cash flows from investing activities
Purchase of property, plant, and equipment
Proceeds from sale of equipment
Net cash used in investing activities
(470,000)
Cash flows from financing activities
Proceeds from issuance of common stock
Proceeds from issuance of long-term debt
Principal payments under capital lease obligation
Dividends paid
(450,000)
Net cash used in financing activities
1,040,000

$45,800,000
(29,800,000)
(11,200,000)
4,800,000
(310,000)
(1,700,000)

(580,000)
110,000

1,000,000
500,000
(10,000)

Net increase in cash and cash equivalents

3,360,000
Cash and cash equivalents at beginning of period
1,640,000
Cash and cash equivalents at end of period
$5,000,000
Reconciliation of net income to net cash provided by operating activities:
Net income
$2,665,000
Adjustments to reconcile net income to net cash provided by operating activities
:
Depreciation and amortization
$125,000
Provision for losses on accounts receivable

15,000

Gain on sale of equipment

)
Increase in interest and income taxes payable

(155,000
32,000

Increase in deferred taxes

90,000

Increase in other liabilities

18,000

Total adjustments
125,000

Net cash provided by operating activities

$2,790,000