Question
Dani Trading Inc. (DTI) is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its
Dani Trading Inc. (DTI) is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:
Ending Balance | Beginning Balance | ||||||
Cash | $ | 85,600 | $ | 102,500 | |||
Accounts receivable | 69,500 | 74,800 | |||||
Inventory | 93,300 | 85,000 | |||||
Property, plant, and equipment | 249,000 | 238,000 | |||||
Less accumulated depreciation | (83,000 | ) | (59,500 | ) | |||
Total assets | $ | 414,400 | $ | 440,800 | |||
Accounts payable | $ | 54,400 | $ | 96,700 | |||
Income taxes payable | 42,300 | 54,100 | |||||
Bonds payable | 102,000 | 85,000 | |||||
Common stock | 119,000 | 102,000 | |||||
Retained earnings | 96,700 | 103,000 | |||||
Total liabilities and stockholders equity | $ | 414,400 | $ | 440,800 | |||
During the year, DTI paid a $10,200 cash dividend and it sold a piece of equipment for $5,100 that had originally cost $11,400 and had accumulated depreciation of $7,600. The company did not retire any bonds or repurchase any of its own common stock during the year.
Required:
How much depreciation would the company add to net income on its statement of cash flows?
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