Avatar Company is preparing its statement of cash flows using the indirect metho
ID: 2453084 • Letter: A
Question
Avatar Company is preparing its statement of cash flows using the indirect method. Refer to the following portion of the comparative balance sheet:
Avatar company Comparative Balance Sheet December 31, 2014 and 2013
2014 2013 Increase/decrease
Accounts Payable $4,000 $6,000 $(2,000)
Accrued Liabilities 2,000 1,000 1,000
Long-Term Notes Payable 56,000 64,000 (8,000)
Total Liabilities $62,000 $71,000 $(9,000)
Additional information provided by the company includes the following: 1) During 2014, the company repaid $35,000 of Long-Term Notes Payable. 2) During 2014, the company borrowed $27,000 on a new Note Payable.
Based on the above information only, what amount of net cash flow would be shown in the financing section of the statement of cash flows? A) $(8,000) B) $8,000 C) $62,000 D) $(62,000)
Explanation / Answer
A) $(8,000)
Net of payment and new borrowed amount
Opening Balance $64,000 Payment $35,000 Borrowed $27,000 Closing Balance $56,000 ($8,000)Related Questions
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