2012 2011 Assets Cash $174,000 $117,000 Accounts Receivable 93,000 81,000 Mercha
ID: 2536632 • Letter: 2
Question
2012 2011
Assets
Cash $174,000 $117,000
Accounts Receivable 93,000 81,000
Merchandise Inventory 609,000 534,000
Equipment 333,000 297,000
Accumulated Depreciation- Equipment (156,000) (102,000)
Total Assets $1,053,000 $927,000
Liabilities & Equity
Accounts Payable $69,000 $96,000
Income taxes payable 27,000 24,000
Common Stock, $2 par value 582,000 558,000
Paid-in capital in excess
of par value, common stock 198,000 162,000
Retained Earnings 177,000 87,000
Total Liabilities & Equity $1,053,000 $927,000
Income Statement
For Year Ended December 31, 2012
Sales $1,992,000
Cost of goods sold 1,194,000
Gross profit 798,000
Operating expenses
Depreciation expense $54,000
Other expenses 501,000 555,000
Income before taxes 243,000
Income taxes expense 42,000
Net income $201,000
Additional Information on Year 2012 Transactions
A. Purchased equipment for $36,000 cash.
B. Issued 12,000 shares of common stock for $5 cash per share.
C. Declared and paid $111,000 in cash dividends.
1. What is the net cash provided by operating activities?
A. $119,000
B. $122,000
C. $135,000
D. $144,000
2. What is the net cash used by investing activities?
A. $(25,000)
B. $(28,000)
C. $(36,000)
D. $(39,000)
3. What is the net cash used by financing activities?
A. $(45,000)
B. $(51,000)
C. $(53,000)
D. $(68,000)
Explanation / Answer
Statement of Cash Flows For the Year Ended December 31, 2012 Cash Flows from Operating Activities: Net income 201000 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense 54000 Increase in receivables -12000 Increase in inventory -75000 Decrease in accounts payable -27000 Increase in Income taxes payable 3000 -57000 Net cash provided by operating activities 144000 Cash Flows from Investing Activities: Purchase of Equipment -36000 Net Cash Provided by Investing Activities -36000 Cash Flows from Financing Activities Payment of Cash Dividends -111000 Issuance of Capital Stock 60000 Net Cash Used by Financing Activities -51000 Net Increase in Cash 57000 Cash at Beginning of Period 117000 Cash at End of Period 174000 1 Net cash provided by operating activities $144000 2 Nt cash used by investing activities (36000) 3 Net cash used by financing activities (51000)
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