Question

Quest Quality Sportswear (QQS) is an athletic wear company, which manufactures boys, girls, men, and women's clothing. The company is located in NC. QQS is a private company. Therefore, audited financial statements are not available to external users on the company website.

At Quest Quality Sportswear, the following changes took place on the company's balance sheet last year:

Note I is for increase and D is for decrease.

Asset and Contra-Asset Accounts	Liabilities and Stockholders' Equity Accounts
Cash and cash equivalents $5 D	Accounts payable $35 I
Accounts receivable $110 I	Accrued liabilities $4 D
Inventory $70 D	Income taxes payable $8 I
Prepaid expenses $9 I	Bonds payable $150 I
Long-term investments $6 D	Common stock $80 D
Property, plant, and equipment $185 I	Retained earnings $54 I
Accumulated depreciation $60 I

Other information:

• Long-term investments that cost the company $6 were sold during the year for $16
• Land that cost $15 was sold for $9.
• The company declared and paid $30 in cash dividends during the year.
• Besides the sale of land, no other sales or retirements of plant and equipment took place during the year.
• QQS did not retire any bonds during the year or issues any new common stock.
• QQS's beginning cash balance was $90.
• QQS's ending cash balance was $85.

QQS's income statement for the year follows:

Sales		$700
Cost of goods sold		400
Gross margin		300
Selling and administrative expenses		184
Net operating income		116
Nonoperating items:
Loss on the sale of land	$(6)
Gain on the sale of investments	10	4
Income before taxes		120
Income taxes		36
Net income		$84

1. Use the indirect method to determine the net cash provided by operating activities for the year.

2. Prepare a statement of cash flows for the year.

Be sure to show your work. Not doing so will result in deductions and/or no credit given

Answer 1

1. Use the indirect method to determine the net cash provided by operating activities for the year.

2. Prepare a statement of cash flows for the year.

Workings

Please hit LIKE button if this helped. For any further explanation or issue, please put your query in comment, will get back to you.