Compute CD ?\'s net cash provided by? (used for) operating activities during Jul

ID: 2532630 • Letter: C

Question

Compute CD ?'s net cash provided by? (used for) operating activities during July 2016 . Use the indirect method.

The accounting records of CD ?Sales, Inc. include the following? accounts:

Ending Balance Account Cash Accounts Receivable Merchandise Inventory Accounts Payable Beginning Balance $5,500 19,000 22,000 13,500 $2,500 13,500 42,000 18,000 Accumulated Depreciation- Equipment Retained Earnings 51,000 Jul. 1 67,000 Jul. 1 2,000 Depr. Exp Dividends 15,000 65,000 Net Inc. 53,000 Jul. 31 17,000 Jul. 31

Explanation / Answer

Solution:

Statement of Cash Flows (Partial)

For the Month Ended July 2016

Cash Flows from Operating Activities

Net Income

$65,000

Adjustments to reconcile net income to Net Cash

Provided by (Used for) Operating Activities:

(+) Depreciation Expense (Non cash item)

$2,000

(+) Decrease in Accounts Receivable (19000 - 13500)

$5,500

(-) Increase in Merchandise Inventory (42,000 - 22,000)

-$20,000

(-) Increase in Accounts Payable (18,000 - 13,500)

-$4,500

-17000

Net Cash Provided by (Used for) Operating Activities

$48,000

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