Question

Q2 (Statement of Cash Flows). Based on the above information, what amount will be reported as the net cash provided by operating, investing, and financing activities for the year on the statement of cash flows. Net Income = $10,000 • Depreciation expense = $4,000 • Decrease in accounts payable = $1,500 • Increase in bonds payable = $8,000 * Sales of long-term investment = $2,000 * Purchase of plant and equipment - $7,000 * Sales of common stock for cash = $1,700 * Increase in inventory = $7,000 * Paid off bonds payable = $3,200 • Decrease in accounts receivable - $6,000 Required: a) The net cash provided by operating activities would be: b) The net cash provided by investing activities would be: c) The net cash provided by financing activities would be:

Answer 1

a.

net income	10,000
add: depreciation	4,000
less: decrease in accounts payable	(1,500)
less:increase in inventory	(7,000)
add:decrease in accounts receivable	6,000
cash flow from operating activities	11,500

b.cash flow from investing activities:

sale of long term investment	2,000
less:purchase of plant and equipment	(7,000)
cash provided by investing activities	(5,000)

c.

increase in bonds payable	8,000
sale of common stock	1,700
less: paid off bonds payable	(3,200)
cash provided by financing activities	6,500