In: Accounting
Ravenna Company 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 | $ | 121,800 | $ | 146,550 | |
Accounts receivable | 95,900 | 103,400 | |||
Inventory | 128,800 | 117,500 | |||
Total current assets | 346,500 | 367,450 | |||
Property, plant, and equipment | 339,000 | 329,000 | |||
Less accumulated depreciation | 113,000 | 82,250 | |||
Net property, plant, and equipment | 226,000 | 246,750 | |||
Total assets | $ | 572,500 | $ | 614,200 | |
Accounts payable | $ | 75,200 | $ | 133,500 | |
Income taxes payable | 58,300 | 80,200 | |||
Bonds payable | 141,000 | 117,500 | |||
Common stock | 164,500 | 141,000 | |||
Retained earnings | 133,500 | 142,000 | |||
Total liabilities and stockholders’ equity | $ | 572,500 | $ | 614,200 | |
During the year, Ravenna paid a $14,100 cash dividend and it sold a piece of equipment for $7,050 that had originally cost $16,800 and had accumulated depreciation of $11,200. The company did not retire any bonds or repurchase any of its own common stock during the year.
a. What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows?
b.What is the company’s net cash provided by (used in) investing activities?
c.What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?
d.What is the company’s net cash provided by (used in) financing activities?
Cash flow from investing activities (CFI) consists of the inflow and outflows of cash resulting from the acquisition of long term assets and investment. | |||||
Cash Flow from financing activities (CFF) consists of the inflow and outflows of cash resulting from transactions affecting a firm's capital structure. |