Question
Cairo Company had a $21,000 net loss from operations. Depreciation expense for the year was $8,600 and a dividend of $6,000 was declared and paid.
Cairo Company had a $21,000 net loss from operations. Depreciation expense for the year was $8,600 and a dividend of $6,000 was declared and paid. The balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End Beginning
Cash $3,500 $7,000
Accounts receivable 16,000 25,000
Inventory 50,000 53,000
Prepaid expenses 6,000 9,000
Accounts payable 12,000 8,000
Accrued liabilities 5,000 7,600
Question - Did Cairo Company's operating activities provide or use cash? The indirect method needs to be used to determine the answer.
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