The following information were extracted from its financial statements of Avatar
ID: 2516257 • Letter: T
Question
The following information were extracted from its financial statements of Avatar Corporation:
Net Loss
($15,800)
Depreciation
$25,300
Issuance of bonds payable
$31,400
Payment of dividend
$5,300
Purchase of equipment
$1,200,000
Sale of equipment
$320,000
Increase in inventory
$12,000
Issuance of common stock
$28,000
Loss on sale of equipment
$42,000
Purchase of treasury stock
$38,000
Increase in accounts payable
$14,000
Increase in accounts receivable
$9,000
Decrease in accrued liability
$1,000
Required:
Prepare a statement showing the computation of the company’s net cash flow provided by operating activities from the above information
2. Prepare a statement showing the computation of the company’s net cash flow provided by financing activities from the above information.
Net Loss
($15,800)
Depreciation
$25,300
Issuance of bonds payable
$31,400
Payment of dividend
$5,300
Purchase of equipment
$1,200,000
Sale of equipment
$320,000
Increase in inventory
$12,000
Issuance of common stock
$28,000
Loss on sale of equipment
$42,000
Purchase of treasury stock
$38,000
Increase in accounts payable
$14,000
Increase in accounts receivable
$9,000
Decrease in accrued liability
$1,000
Explanation / Answer
net cash flow provided by operating activities net loss -15,800 Adjustments to reconcile net income Depreciation expense 25,300 loss on sale of Equipment 42,000 increase in inventory -12,000 increase in accounts payable 14,000 increase in accounts receivable -9,000 Decrease in accrued liability -1,000 net cash flow provided by operating activities 43,500 Net cash provided by financing activities issuance of bonds payable 31,400 payment of dividend -5,300 issusance of common stock 28,000 purchase of treasury stock -38,000 Net cash provided by financing activities 16,100
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