Statement of Cash Flows (Short Answer) Use the following information to perform

Question

Statement of Cash Flows (Short Answer)

Use the following information to perform the calculations below (using the indirect method). Clearly label the amount of each answer as positive or negative. Enter your number in whole dollars and use commas and dollar signs. You need to show your calculations. I know that's tedious, but if you don't have the correct answer I need to see the calculation to give you partial credit.

Net income $369,000 Beginning Accounts Payable $119,000
Depreciation expense 97,000 Ending accounts payable 146,000
Beginning accounts receivable 420,000 Purchase of equipment for cash 612,000
Ending accounts receivable 439,000 Issuance of long-term debt 200,000
Beginning inventory 516,000 Issuance of stock for cash 160,000
Ending inventory 560,000 Issuance of stock for land 110,000
Beginning prepaid expenses 42,000 Purchase of treasury stock 64,000
Ending prepaid expenses 48,000 Sale of long-term investment at cost 39,000



1. Calculate the amount of cash flows from operations. (Points : 5)



2. Calculate the amount of cash flows from investing activities. (Points : 5)



3. Calculate the amount of cash flows from financing activities. (Points : 5)



4. Calculate the net change in cash. (Points : 5)

Explanation / Answer

amount of cash flows from operations.

net income =369000
add:depreciation= 97000
add:increase in accounts payable(146000-119000)= 27000
less:increase in accounts receivable (439000-420000)=(19000)
less:increase in inventory (560000-516000)=(44000)
less:increase in prepaid expenses (48000-42000)=(6000)

cash flow from operations :424000

amount of cash flows from investing activities.

purchase of equipment (612000)
sale of long term investment 39000

cash flow from investing activities (573000)

amount of cash flows from financing activities.

issuance of long term debt 200000
Issuance of stock for cash 160,000
Purchase of treasury stock (64,000 )

cash flow from financing activities: 296000

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