value: 20.00 points Suppose the income statement for Goggle Company reports S95

Question

value: 20.00 points Suppose the income statement for Goggle Company reports S95 of net income, after deducting depreciation of $35. The company bought equipment costing $60 and obtained a long-term bank loan for $70 Required 1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities +for increase and for decrease). (Select "NE" if there is no effect. Enter all amounts as positive values.) Previous Year Current Year Change Type Cash 35 $ 240 175100 Operating 135 560 60 Investing (80) 205 Cash 75 260 500 (45) 825 $ Accounts Receivable 125 Operating Equipment Accumulated Depreciation- Equipment 35 Operating Total Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings 1,030 5040 Operating 51570 Financing lof NE 0rFinancing 45595 Operating 10 $ 445 10 360 825 $ Total 1,030

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 95 Adjustments to reconcile the net income Depreciation expense 35 Changes in current asset and liabilities Increase in accounts receivable -100 Decrease in Inventory 125 Increase in salary and wages payable 40 100 Cash flow from operating activities 195 Cash flow from Investing activities Equipment purchased -60 Cash flow from Investing activities -60 Cash flow from Financing activities Common stock 0 Notes payable 70 Cash flow from Financing activities 70 Net Cash and cash equivalent 205 Add Beginning cash and cash equivalent 35 Ending cash and cash equivalent 240

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