Cassin Corp\'s balance sheet accounts as of December 31, 2015 and 2014 and infor

Question

Cassin Corp's balance sheet accounts as of December 31, 2015 and 2014 and information relating to 2015 activities are presented below. December 31 Information relating to 2015 activities: Net income for 2015 was $1,300,000. Equipment costing $500,000 and having a carrying value(book value) of $280,000 was sold in 2015 for $290,000. A long-term investment was sold in 2015 for $175,000. There were no other transactions affecting long-term investments in 2015. Compute cash flows from operating activities, using the indirect method

Explanation / Answer

Cash flow from net operating activities using indirect method Net income 1,300,000 Add: Depreciation 100,000 Decrease in account receivable 20,000 increase in accounts payable 150,000 loss on sale of investment 25,000 less: Gain on sale of Equipment 10,000 increase in inventory -180,000 125,000 125,000 Nwt cash from operating activities 1,425,000

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