Beginning Accounts Payable Ending Accounts Payable Purchase

Beginning Accounts Payable Ending Accounts Payable Purchase of Long-Term Assets with Cash Cash from Issuance of Long-Term Debt Net Income Depreciation Expense Amortization of Intangible Assets 11,000 Beginning Accounts Receivable420,000 Ending Accounts Receivable Beginning Inventory Ending Inventory Beginning Prepaid Expenses Ending Prepaid Expenses $119,000 146,000 616,000 200,000 160,000 $365,000 96,000 439,000 Issuance of Stock for Cash 516,000 suance of Stock for Long-Term Assets 110,000 560,000 Purchase of Treasury Stock 64,000 48,000 42,000 The Net Cash Flows from Investing Activities section will include: Select one: a, $(616,000) b, $110,000 c.$(110,000) d. $160,000 e, $616,000

Solution

Statement of Cash Flows - Indirect Method (Opearing Activities) Amount in $ Amount in $ Net income $          3,65,000 Cash flows from operating activities Adjustments for: Depreciation $             96,000 Amortization of intangible assets $             11,000 (Increase) / Decrease in Account receivables $            -19,000 Inventory Decrease / (Increase) $            -44,000 Accounts payable Increase / ( Decrese) $             27,000 Prepaid Expenses $                6,000 $             77,000 Net cash from operating activities $          4,42,000 Cash flows from investing activities Purchase of Long term Assets $        -6,16,000 Purchase of Equipment Net cash used in investing activities $        -6,16,000 Cash flows from Financing activities Cash from issuance from long term Debt $          2,00,000 Issuance of stock $          1,60,000 Purhcase of Treasury Stock $            -64,000 Net cash used in financing activities $          2,96,000 Answer = 1) Cash flow from investing activities section will include = Option A = ( $ 616,000 ) Answer = 2) Net Cash Flow from financing activities section will include = Option B = ( $ 64,000 )