Walmouth Corporation\'s comparative balance sheet and income statement for last

Question

Walmouth Corporation's comparative balance sheet and income statement for last year appear below:

  

The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.

The net cash provided by (used in) operating activities last year was:

$58,000

$130,000

$152,000

$105,000

Comparative Balance Sheet Ending Balance Beginning Balance Cash $40,000 $32,000 Accounts receivable 89,000 79,000 Inventory 48,000 55,000 Prepaid expenses 8,000 11,000 Long-term investments 250,000 210,000 Property, plant and equipment 550,000 550,000 Less accumulated depreciation 264,000 239,000 Total assets $721,000 $698,000 Accounts payable $58,000 $46,000 Accrued liabilities 15,000 19,000 Income taxes payable 55,000 41,000 Bonds payable 100,000 160,000 Common stock 150,000 140,000 Retained earnings 343,000 292,000 Total liabilities and stockholders' equity $721,000 $698,000

Explanation / Answer

Answer c. $152,000 Statement of Cash Flows (Indirect Method) Cash Flow from opearating activities: Net Income (Loss)           105,000 Add/(Less) non cash effects on operating activities Depreciation expense                  25,000 Increase in Accounts Receivables               (10,000) Decrease in Inventory                    7,000 Decrease in Prepaid Expenses                    3,000 Increase in Accounts Payable                  12,000 Decrease in Accrued Liabilities                  (4,000) Increase in Income Tax Payable                  14,000              47,000 Net Cash provided by operating activities           152,000

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