Cezar Corporation\'s comparative balance sheet appears below: 60,000 54,000 128,
ID: 2371112 • Letter: C
Question
Cezar Corporation's comparative balance sheet appears below:
60,000
54,000
128,000
112,000
187,000
154,000
177,000
186,000
$305,000
$298,000
49,000
44,000
82,000
74,000
191,000
186,000
87,000
78,000
114,000
112,000
$305,000
$298,000
The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $15,000 and its cash dividends were $6,000. The company did not retire any bonds payable or issue any common stock during the year. Its net cash provided by operating activities and net cash used in financing activities are:
Cezar Corporation's comparative balance sheet appears below:
Explanation / Answer
Net cash provided by operating activities:
Step 1: The company did not sell or retire any plant and equipment during the year (land is not depreciated); therefore, the $40 increase in Accumulated Depreciation equals the credit to the account that is added to net income.
Step 2: The guidelines from Exhibit 14-2 can be used to analyze the changes in noncash balance sheet accounts that impact net income as follows:
Increase in
Account Balance
Decrease in
Account Balance
Current Assets
Accounts receivable.........................
+ 10
Inventory.......................................
Increase in
Account Balance
Decrease in
Account Balance
Current Assets
Accounts receivable.........................
+ 10
Inventory.......................................
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