Krech Corporation\'s comparative balance sheet appears below: Ending Balance Beg

Question

Krech Corporation's comparative balance sheet appears below: Ending Balance Beginning Balance Assets: Current assets: Cash and cash equivalents Accounts receivable $31,000 18,000 58 Prepaid expenses Total current assets Property, plant, and equipment 19,000 374,000 114 354 165 18 Less accumulated depreclation Net property, plant, and equipment Total assets Liabilities and Stockholders' Equity Current labilities 184.000 303.0 $13 52 67.000 132,000 76,000 208,000 69 Accounts peyable Accrued liabilities Income taxes payable 69 Total current liabilities Bonds payable Total liabilities 131 73,000 204.0 Stockholders' equity: 28,000 67,000 Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' eguity 73.00 95.0 303.0 The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. The company's net cash provided by operating activities is: O $27000 O $21,000 O $29,000 O $19,000

Explanation / Answer

Correct answer is B 21,000

Cash flow indirect method Cash flow from operating activities Net income -3000 Adjustments to reconcile the net income Gain on sale of Investment Depreciation expense 25000 Decrease in accounts receivable 2000 Increase in Inventory -2000 Increase in prepaid expense -2000 Increase in accounts payable 4000 Decrease in accrued liabilities -1000 Decrease in income tax payable -2000 24000 Cash flow from operating activities 21000

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