Question

The following information is related to Towson Company's fiscal year 2018.

            Income Statement:

                        Net Income                             $2,700,000

                        Depreciation Expense 400,000

                        Loss on Sale of Plant Assets 25,000

                        Interest Expense                             5,000

            Balance Sheet - 12/31/17: Increase (Decrease)

                        Accounts Payable decrease 45,000

                        Plant Assets - Purchased        250,000

                        Plant Assets - Disposals         (100,000)

                        

            Additional Information:

                        Common Stock exchanged for outstanding Long Term Notes Payable of $125,000

                        Dividends paid were $30,000

Use this information to determine Towson Company's Net Cash Flows from Operating Activities. If the amount is an outflow then enclose the amount with dollar sign inside of brackets ( ).

Answer 1

Statement of cash flows (partial)

Particulars	$	$
Cash flow from Operating Activities
Net income	2,700,000
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	400,000
Loss on sale of plant assets	25,000
Accounts payable decrease	- 45,000
Net cash provided by Operating Activities		$3,080,000

Towson Company's Net Cash Flows from Operating Activities. = $3,080,000

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