Use the following balance sheets and income statement to answer QS 12-11 through

Question

Use the following balance sheets and income statement to answer QS 12-11 through QS 12-16.

Required

Use the indirect method to prepare the cash provided or used from operating activities section only of the statement of cash flows for this company.

Page 564

QS 12-12

Refer to the data in QS 12-11.

Furniture costing $55,000 is sold at its book value in 2015. Acquisitions of furniture total $45,000 cash, on which no depreciation is necessary because it is acquired at year-end. What is the cash inflow related to the sale of furniture?

Explanation / Answer

Solution.

CRUZ,INC. Cash Flow Statement For the Year Ended Dec 31, 2015 Cash Flows from Operating Activities: Operating Income (EBIT)            47,300 Depreciation Expense            37,600 Loss on Sale of Equipment               7,300 Gain on Sale of Land          (51,000) Decrease in Accounts Receivable               1,000 Decrease in inventory            10,000 Increase in Prepaid Expenses            (1,200) Decrease in Accounts Payable            (6,000) Increase in Accrued Expenses               4,000 Cash genrated from operation            49,000 Income tax paid          (18,500) Net Cash Flow from Operating Activities            30,500

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