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A company reports the following cash flow activities for the year ending December 31, 2023: Cash Flow Activity Amount Net Income $400,000 Depreciation Expense $50,000
A company reports the following cash flow activities for the year ending December 31, 2023:
Cash Flow Activity | Amount |
Net Income | $400,000 |
Depreciation Expense | $50,000 |
Increase in Accounts Receivable | $30,000 |
Decrease in Inventory | $20,000 |
Increase in Accounts Payable | $10,000 |
Purchase of Equipment | $150,000 |
Proceeds from Issuance of Common Stock | $200,000 |
Payment of Dividends | $50,000 |
Repayment of Long-term Debt | $100,000 |
Using the provided information, perform the following analyses:
- Calculate the Net Cash Provided by Operating Activities by adjusting Net Income for non-cash items and changes in working capital accounts.
- Determine the Net Cash Used in Investing Activities, including the purchase of equipment, and discuss how this section reflects the company’s investment in long-term assets.
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