5, 19 20, Receivable Merchandise Inventory Buildings 110, 24 187 108, 8, 25, 20

Question

5, 19 20, Receivable Merchandise Inventory Buildings 110, 24 187 108, 8, 25, 20 35, s Payable Depre-Buildings Bonds Payable (due 2050) n Stock ($1 par value) 36 187 Retained Earnings 108, SALLY COMPANY INCOME STATEMENT For The Year Ended December 31, 2012 132, 93. Cost of Goods Sold 24. Net Income 1. Sally declared and paid cash dividends of $8,000 during 2012. 2. Issued $12,000 of Bonds Payable at face value during 2012 for cash. Purchased Land during 2012 for cash. Issued 41,000 shares of common stock at par for cash during 2012. Constructed an addition to the Buildings during 2012 for cash. The cash provided by (used in) operating activities for 2012 is: O $42,000 $32,000. O $46,000 $30,000.

Explanation / Answer

Solution:

Hence last option is correct.

Sally Company Statement of Cash Flows (Partial) For year ended December 31, 2012 Particulars Details Amount Cash Flow from Operating Activities: Net Income $24,000.00 Adjustments to reconcile net income to net cash provided by operations: Depreciation Expense $15,000.00 Increase in accounts receivables ($20,000 - $19,000) -$1,000.00 Increase in inventory ($13,000 - $10,000) -$3,000.00 Decrease in accounts payable ($8,000 - $3,000) -$5,000.00 Net Cash provided by operating activities $30,000.00

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