Question
A companys cash flow statement for the year ended December 31, 2023, presents the following information: Cash Flows from Operating Activities Amount ($) Net Income
A company’s cash flow statement for the year ended December 31, 2023, presents the following information:
Cash Flows from Operating Activities | Amount ($) |
Net Income | $1,200,000 |
Depreciation Expense | $300,000 |
Increase in Accounts Receivable | $80,000 |
Decrease in Inventory | ($40,000) |
Increase in Accounts Payable | $60,000 |
Interest Expense Paid | ($100,000) |
Income Tax Paid | ($250,000) |
Net Cash Provided by Operating Activities | $1,250,000 |
Cash Flows from Investing Activities | Amount ($) |
Purchase of Equipment | ($500,000) |
Proceeds from Sale of Investments | $100,000 |
Net Cash Used in Investing Activities | ($400,000) |
Cash Flows from Financing Activities | Amount ($) |
Proceeds from Issuance of Long-term Debt | $800,000 |
Repayment of Short-term Borrowings | ($200,000) |
Payment of Cash Dividends | ($300,000) |
Net Cash Provided by Financing Activities | $300,000 |
a. Calculate the Net Cash Provided by Operating Activities using the indirect method. b. Determine the Net Cash Used in Investing Activities and explain its implications for capital expenditures. c. Analyze the Financing Activities section and discuss its impact on the company’s capital structure.
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