Purchase investment in bonds for $115,000. Sell land costing $40,000 for only $31,000, resulting in a $9,000 loss on sale of lan
d. Purchase $70,000 in equipment by issuing a $70,000 long-term note payable to the seller. No cash is exchanged in the transaction. Declare and pay a cash dividend of $30,000. Required Prepare the statement of cash flows using the indirect method.
1 answer:
Answer:
net cash flow 26,800
Explanation:
NOTE: missing information attached.
Operating
net income 104,000
removal of non-monetary terms
depreciation expense 37,000
loss on sale of land 9,000
adjusted net income 150,000
<u>Changes in working capital:</u>
Increase in AR (22,000)
Decrease in Inventory 40,000
Prepaid increase (7,200)
Decrease in AP (16,000)
decrease interest paayble (5,000)
increase in tax payable 1,000
net change in working capital (9,200)
net cash generated from operating 140,800
investing
sale of land 31,000
purchase of debt securities (115,000)
cash used in investing activities 84,000
financing
cash dividends (30,000)
cash used in financing activites 30,000
net cash flow 26,800
beginning cash 227,800
ending cash 254,600
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