Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2011 and 2010 are provided below.

Balance Sheet

12/31/11

12/31/10

Cash

204,000

96,000

Accounts receivable

180,000

108,000

Merchandise inventory

192,000

240,000

Property, plant and equipment

304,000

480,000

Less accumulated depreciation

(160,000)

144,000

(152,000)

328,000

720,000

772,000

Accounts payable

88,000

48,000

Income taxes payable

176,000

196,000

Bonds payable

180,000

300,000

Common stock

108,000

108,000

Retained earnings

168,000

120,000

720,000

772,000

Income Statement

For the fiscal year 2011

Sales

4,200,000

Cost of sales

3,576,000

Gross profit

624,000

Selling expense

300,000

Administrative expenses

96,000

396,000

Income from operations

228,000

Interest expense

36,000

Income before taxes

192,000

Income taxes

48,000

Net income

144,000

The following additional data were provided:

1.Dividends for the year 2011 were $96,000.

2.During the year, equipment was sold for $130,000. This equipment cost $176,000 originally and had a book value of $144,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.

3.All depreciation expense is in the selling expense category.

The net cash provided (used) by investing activities is

Group of answer choices

$120,000

$(144,000).

$130,000

$(176,000)