Question

Use the following to answer questions 1-3:

The balance sheet data of Kohler Company at the end of 2015 and 2014 follow:

2015                2014

Cash $ 100,000        $ 140,000

Accounts receivable (net) 240,000           180,000

Inventory 280,000           180,000

Prepaid expenses 40,000           100,000

Buildings and equipment 360,000           300,000

Accumulated depreciation—buildings and equipment (72,000)          (32,000)

Land 360,000          160,000

Totals $1,308,000     $1,028,000

Accounts payable $ 272,000       $220,000

Accrued expenses 48,000 72,000

Notes payable—bank, long-term 160,000

Mortgage payable 120,000

Common stock, $10 par 836,000           636,000

Retained earnings (deficit) 32,000           (60,000)

$1,308,000      $1,028,000

Land was acquired for $200,000 in exchange for common stock, par $200,000, during the year; all equipment purchased was for cash. Equipment costing $20,000 was sold for $8,000; book value of the equipment was$16,000 and the loss was reported as an ordinary item in net income. Cash dividends of $40,000 were charged to retained earnings and paid during the year; the transfer of net income to retained earnings was the only other entry in the Retained Earnings account. In the statement of cash flows for the year ended December 31,2015, for Naley Company:

1. The net cash provided by operating activities was

A) $104,000.

B) $132,000.

C) $112,000.

D) $96,000.

2. The net cash provided (used) by investing activities was

A) $52,000.

B) $(80,000).

C) $(272,000).

D) $(72,000).

3. The net cash provided (used) by financing activities was

A) $ -0-.

B) $(40,000).

C) $(80,000).

D) $120,000.

Please show steps for the solution

Answer 1

cash flows from Operating activities:
Net income for the year		132000
Adjustment required for reconciliation
Depreciation			44000
Loss on sale			8000
Increase in Accounts receivable		-60,000
Increase in Inventory			-1,00,000
Decrease in prepaid expense		60,000
Increase in accounts payable		52000
Decrease n Accrual expense		-24000
Net cash provided from Operating activiites	112000
Cash flows from Investing activities
Sale of Equipment			8000
Purchase of equipment		-80,000
Net cash used in investing activities		-72000
Cash Flows from Financing activities
Dividend paid			-40000
Mortgage note issued		1,20,000
Bank Loan Note repaid		-1,60,000
Net cash used in Financing activities		-80,000
Q1.
Answer is C. $112,000
Q2.
Answer is D/ ($72,000)
Q3.
Answer is C. ($80,000)