Comparative financial statement data for Carmono Company follow: This Year Last

Question

Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash Accounts receivable Inventory Total current assets Property, plant, and equipment $ 6.50 46.00 87.50 140.00 225.00 44.00 181.00 12.00 39.00 74.00 125.00 190.00 33.00 157.00 Less accumulated depreciation Net property, plant, and equipment Total assets $321.00 $282.00 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity 52.50 110.00 158.50 $321.00 $44.00 85.00 153.00 $282.00 For this year, the company reported net income as follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net income $750.00 450.00 300.00 280.00 $ 20.00

Explanation / Answer

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Carmono Company Statement of Cashflows For the year Ended December 31 Cash flows from operating activities Net Income $   20.00 Adjustments to reconcile net income to : Depreciation expense $   11.00 44-33 Increase in accounts receivable $   (7.00) 39-46 Increase in inventory $ (13.50) 74-87.5 Increase in accounts payable $      8.50 52.5-44 $   (1.00) Net cash flow from operating activities $   19.00 Cash flows from investing activities Cash paid for Purchase of equipment $ (35.00) 190-225 Net cash used for investing activities $ (35.00) Cash flows from financing activities Cash paid for dividend $ (14.50) 158.5-153-20 Cash received from issue of shares $   25.00 110-85 Net cash flow provided by financing activities $   10.50 Net Decrease in cash and cash equivalents $   (5.50) Cash and cash equivalents at beginning of period $   12.00 Cash and cash equivalents at end of period $      6.50

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