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Problem 17-3 Determining amounts reported on statement of cash flows (LO 17-1, LO 17-2, LO 17-4)

The following are selected balance sheet accounts of Zach Corporation at December 31, 2017 and 2016, as well as the increases or decreases in each account from 2016 to 2017. Also presented is selected income statement information for the year ended December 31, 2017, as well as additional information.

Selected Balance Sheet Accounts
	2017			2016			Increase (Decrease)
Assets
Accounts receivable	$	34,000		$	24,000		$	10,000
Property, plant, and equipment		277,000			247,000			30,000
Accumulated depreciation		(178,000	)		(167,000	)		11,000
Liabilities and stockholders equity
Bonds payable		49,000			46,000			3,000
Dividends payable		8,000			5,000			3,000
Common stock, $1 par		22,000			19,000			3,000
Additional paid-in capital		9,000			3,000			6,000
Retained earnings		104,000			91,000			13,000

Selected Income Statement Information for the Year Ended December 31, 2017
Sales revenue	$	155,000
Depreciation		33,000
Gain on sale of equipment		13,000
Net income		28,000

Additional Information:

Accounts receivable relate to sales of merchandise.

During 2017, equipment that cost $40,000 was sold for cash.

During 2017, $20,000 of bonds payable were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium.

Required:

Items 1 through 5, which follow, represent activities that will be reported in Zachs statement of cash flows for the year ended December 31, 2017. For each item, determine both the amount that should be reported in Zachs 2017 statement of cash flows and the section (operating, investing, or financing) in which the item should appear. (Enter all answers as positive values.)

1. Cash collections from customers (direct method). What is the amount and section?

2. Payments for the purchse of plant, property and equipment. What is the amount and section?

3. Proceeds from the sale of equipment. What is the amount and section?

4. Redemption of bonds payable. What is the amount and section?

5. Cash dividends paid. What is the amount and section?

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