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.
Questions 55 through 59 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?