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The balance sheet data of Naley Company at the end of 2019 and 2018 follow: 2019...

The balance sheet data of Naley Company at the end of 2019 and 2018 follow: 2019 2018 Cash $ 50,000 $ 70,000 Accounts receivable (net) 120,000 90,000 Merchandise inventory 140,000 90,000 Prepaid expenses 20,000 50,000 Buildings and equipment 180,000 150,000 Accumulated depreciation—buildings and equipment (36,000) (16,000) Land 180,000 80,000 Totals $654,000 $514,000 Accounts payable $136,000 $110,000 Accrued expenses 24,000 36,000 Notes payable—bank, long-term 80,000 Mortgage payable 60,000 Common stock, $10 par 418,000 318,000 Retained earnings (deficit) 16,000 (30,000) $654,000 $514,000 Land was acquired for $100,000 in exchange for common stock, par $100,000, during the year; all equipment purchased was for cash. Equipment costing $10,000 was sold for $4,000; book value of the equipment was $8,000 and the loss was reported as an ordinary item in net income. Cash dividends of $20,000 were charged to retained earnings and paid during the year; the transfer of net income to retained earnings was the only other entry in the Retained Earnings account. For the year ending December 31, 2019, calculate the following amounts:

a) The net cash provided (used) by operating activities

b) The net cash provided (used) by investing activities

c) The net cash provided (used) by financing activities

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Answer #1
Cash Flow Statement
Opening Balance 70000
Cash flow from Operating Activities: 56000
Net profit 66000
Less : Increase in Current Assets:
Account Receivable -30000
Inventory -50000
Add : Decrease in Current Assets:
Prepaid Expenses 30000
Add : Increase in Current Liabilities:
Accounts payables 26000
Less : Decrease in Current Liabilities:
Accured Exp -12000
Add: Loss on sale 4000
Add: Depreciation 22000
Cash flow from investing Activities: -36000
Assets Sold 4000
Assets Purchase -40000
Cash flow from financing Activities: -40000
Dividends Paid -20000
Long Term Loan Paid -80000
Mortage 60000
Closing Balance 50000
Working Note:
Calculation of Net Profit
Retained Earnings Opening Balance -30000
Dividen Paid 20000
Retained Earnings Closing Balance 16000
Net Profit 66000
Calculation of Loss on Fixed Assets
Book Value 8000
Sale for 4000
Loss on Sale 4000
Calculation of Purchase of Fixed Assets
Opening Balance 150000
Closing Balance 180000
Cost of Asset Sold 10000
Purchase amount 40000
Calculation of Dep. For Current Year
Opening Accu. Dep. 16000
Closing Accu. Dep. 36000
Dep. Of asset sold 2000
Current Year Dep. 22000
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