Problem - Paxson Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Paxson Mining Co. for 2008 and 2007 are provided below.
BALANCE SHEETS
12/31/08 12/31/07
Cash $204,000 $ 96,000
Accounts receivable 180,000 108,000
Merchandise inventory 192,000 240,000
Property, plant and equipment $304,000 $480,000
Less accumulated depreciation (160,000) 144,000 (152,000) 328,000
$720,000 $772,000
Accounts payable $ 88,000 $ 48,000
Income taxes payable 176,000 196,000
Bonds payable 180,000 300,000
Common stock 108,000 108,000
Retained earnings 168,000 120,000
$720,000 $772,000
INCOME STATEMENT
For the Year Ended December 31, 2008
Sales $4,200,000
Cost of sales 3,576,000
Gross profit 624,000
Selling expenses $300,000
Administrative expenses 96,000 396,000
Income from operations 228,000
Interest expense 36,000
Income before taxes 192,000
Income taxes 48,000
Net income $ 144,000
The following additional data were provided:
1. Dividends for the year 2008 were $96,000.
2. During the year, equipment was sold for $120,000. This equipment cost $176,000 originally and had a book value of $144,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
3. All depreciation expense is in the selling expense category.
Question relate to a statement of cash flows (direct method) for the year ended December 31, 2008, for Paxson Mining Company.
What is the net cash provided by operating activities?