Question

The following information is given for Tripp Company, which uses the indirect method

Answer 1

Answer:

Step-by-step explanation:

1.

The cash flow from operating activities is = $28000.

Working Note:

Net Income                                                        $20000

Depreciation expense                                   $3000

Increase in accounts receivable                 ($2000)

Increase in accounts payable                      $4000

Decrease in inventory                                    $3000

Net Cash Flow from Operating Activities = 20000 + 3000 – 2000 + 4000 + 3000

Net Cash Flow from Operating Activities = $28000

2.

The cash flow from investing activities = $6000.

Working Note:

Proceeds from sale of equipment                            $6000

Net cash flow from investing activities =               $6000

3.

The cash flow from financing activities = - $2000              or ($2000)

Working Note:

Payment of dividends                                    ($2000)

Net Cash flow from financing activities = - $2000                or ($2000)