Answered step by step
Verified Expert Solution
Question
1 Approved Answer
AP_17B Bloomwash Corporation has prepared the following statement of cash flows for the Year end. Bloomwash Corporation Statement of Cash Flows 7 For the Year
AP_17B Bloomwash Corporation has prepared the following statement of cash flows for the Year end. Bloomwash Corporation Statement of Cash Flows 7 For the Year Ended December 31, 2021 8 Cash Flow from Operating Activities 9 Net Income $35,200 10 Adjustments to Reconcile Net Income to Net Cash 11 Provided (Used) by Operating Activities 12 Depreciation Expense 4,600 13 Gain on Sale of Equipment -7,300 14 Changes in Operating Assets and Liabilities 75 Increase in Accounts Receivable -22,000 16 Decrease in Merchandise Inventory 60,600 17 Decrease in Accounts Payable -7,500 8 Net Cash Provided (Used) by Operating Activities 9 0 Cash Flow from Investing Activities 1 Sale of machine 56,200 2 Purchase of Land & Building -186,000 3 Net Cash Provided (Used) by Investing Activities 4 5 Cash Flow from Financing Activities Proceeds from Issuance of Common Stock 45,000 $63,600 -129,800 Decrease in Merchandise inventory 17 Decrease in Accounts Payable 60,600 -7,500 18 Net Cash Provided (Used) by Operating Activities 19 $63,600 20 Cash Flow from Investing Activities 21 Sale of machine 56,200 22 Purchase of Land & Building -186,000 23 Net Cash Provided (Used) by Investing Activities -129,800 24 25 Cash Flow from Financing Activities 26 Proceeds from Issuance of Common Stock 45,000 27 Proceeds from Notes Payable 62,000 28 Payment of Dividends -50,000 29 Net Cash Provided (Used) by Financing Activities 57,000 30 31 Net Increase (Decrease) in Cash -9,200 32 Cash at the Beginning of the Year 12,000 33 Cash at the End of the year $2,800 34 35 36 Required 37 38 a) The company had a total decrease in cash during the year of $9,200. What is the primary cause of 39 this decrease in cash? 56 Required 38 a) The company had a total decrease in cash during the year of $9,200. What is the primary cause of 39 this decrease in cash? 40 42 43 45 47 18 49 b) Are there any concerns with operating activities? 50 51 52 53 54 55 56 S 7 Analysis In a cash flow budgeting meeting, the company's President argued that, "we could have taken a larger loan to finance our land and building purchase in 2021. In fact, instead of borrowing only $62,000, we should have asked for $186,000. That would have put us into a better cash flow situation." Evaluate this comment from the President. How would a larger loan affect the cash flow of
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started