The following selected information was obtained from a company's comparative balance sheets. Assume the company's 2021 income
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Question:
The following selected information was obtained from a company's comparative balance sheets. Assume the company's 2021 income statement showed depreciation expense of $21,000, a gain on sale of investments of $7,250, and a net income of $64,375.
1. In general, explain the three major types of activities classified on a statement of cash flows. | |||||
2. For the company in this example, calculate the net cash flow from operating activities using the indirect method. |
December 31 | December 31 | |||||
2021 | 2020 | |||||
Cash | 24,350 | 12,250 | ||||
Accounts Receivable | 48,200 | 38,150 | ||||
Inventory | 55,125 | 58,375 | ||||
Prepaid Rent | 8,250 | 1,500 | ||||
Long-Term Investments | 26,100 | 31,525 | ||||
PPE | 159,550 | 117,225 | ||||
Accumulated Depreciation | 43,225 | 33,125 | ||||
Accounts Payable | 24,375 | 27,200 | ||||
Income Tax Payable | 6,250 | 17,575 | ||||
Common Stock | 126,250 | 124,125 | ||||
Retained Earnings | 121,125 | 56,750 |
Related Book For
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
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