Cash dividends were $9. The company sold equipment for $15 that was originally p

Question

Cash dividends were $9. The company sold equipment for $15 that was originally purchased for $10 and that had accumulated depreciation of $5.

1. The net cash provided by (used by) operations for the year was:

2. The net cashy provided by (used by) investing activities for the year was:

*Please include formulas used*

Comparative Balance Sheet EndingBeginning BalanceBaiance Assets Cash and cash equivalents Accounts receivable Inventory Plant and equipment S 31 24 53 461 (306 S 33 30 47 390 Accumulated depreciation Total assets (256) 244 $263 Liabilities and stockholders' equity Accounts payable Wages payable Taxes payable Bonds payable Deferred tazes Common stock Retained earnings Total liabilities and stockholders' equity...$263 $ 49 17 20 75 19 53 90 18 50 244 Income Statement Sales Less cost of sales Gross margn Less operating expenses Net operating income Gain on sale of plant and equipment Income before taxes Less income tazes Net income $634 400 234 174 60 10 70 $49

Explanation / Answer

Particulars $ $ Net profit 49 Add: adjustments to reconcile net income to the operating cash flow Depreciation [(306-256) + (10-5)] 55 Decrease in accounts receivable(30-24) 6 Increase in deferred tax 1 Increase in inventory(53-47) -6 Decrease in accounts payable(49-42) -7 Decrease in wages payable (17-16) -1 Decrease in tax payable (22-20) -2 Gain on sale of plant -10 Total adjustments 36 Cash provided by operating activites 85 Investing activites Sale of plant 15 Purchase of plant (461+10-390) -81 Net cash used in investing activites -66 Financing Activites Payment of dividend -9 Repayment of bonds -15 issue of common stock 3 Net cash used in financing activites -21 Net cash used in the year -2

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