Question
16. Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
16. Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
| 2014 | 2013 | Increase/decrease |
Accounts payable | $ 4,000 | $ 6,000 | $(2,000) |
Accrued liabilities | 2,000 | 1,000 | 1,000 |
Long-term notes payable | 84,000 | 90,000 | (6,000) |
Total liabilities | $90,000 | $97,000 | $(7,000) |
Additional information provided:
During 2014, the company repaid $40,000 of long-term notes payable.
During 2014, the company borrowed $34,000 on a new note payable.
Based on the above information only, what amount of net cash flow would be shown in the financing section of the statement of cash flows?
A) $6,000 negative
B) $6,000 positive
C) $5,000 positive
D) $7,000 negative
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