Use the indirect method to answer questions a and b. The following information i

Question

Use the indirect method to answer questions a and b. The following information is available for Casey Company:

   Net income           $300       Increase in plant and equip. 190

   Depreciation expense         100       Payment of dividends       25

Increase in accts. receivables.      30       Increase in long-term debt   100

   Decrease in inventories      10       Decrease in accounts payable   20

a. Calculate cash flow from operating activities for Casey Company?

b. Calculate the cash from investing activities for Casey Company?

Please show steps of how to do this problem as well, that is where most help is needed.

Explanation / Answer

Answer a.

Cash Flow from Operating Activities = Net income + Depreciation expense - Increase in accounts receivable + Decrease in inventories - Decrease in accounts payable
Cash Flow from Operating Activities = $300 + $100 - $30 + $10 - $20
Cash Flow from Operating Activities = $360

Answer b.

Cash Flow from Investing Activities = Increase in plant and equipment
Cash Flow from Investing Activities = -$190

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.