A comparative balance sheet for Talkington Corporation is presented below. December 31 Assets 2017 2016 Cash...

A comparative balance sheet for Talkington Corporation is presented below.

	December 31
Assets	2017	2016
Cash	$68,000	$22,000
Accounts receivable	82,000	66,000
Inventory	170,000	189,000
Land	71,000	110,000
Equipment	280,000	200,000
Accumulated depreciation–equipment	(74,000)	(42,000)
Total	$597,000	$545,000
Liabilities and Stockholders’ Equity
Accounts payable	$34,000	$47,000
Bonds payable	150,000	200,000
Common stock ($1 par)	164,000	164,000
Retained earnings	249,000	134,000
Total	$597,000	$545,000

Additional information:

1.		Net income for 2017 was $155,000; there were no gains or losses.
2.		Cash dividends of $40,000 were declared and paid.
3.		Bonds payable of $50,000 were retired.

Compute each of the following:

1.	Net cash provided by operating activities	$
2.	Net cash provided (used) by investing activities	$
3.	Net cash provided (used) by financing activities	$

Solutions

Expert Solution

1. Net cash provided by operating activities	177000
2. Net cash provided (used) by investing activities	(41000)
3. Net cash provided (used) by financing activities	(90000)

Workings:
Cash Flows from Operating Activities:
Net income		155000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	32000
Increase in Accounts receivable	-16000
Decrease in inventory	19000
Decrease in accounts payable	-13000
		22000
Net cash provided by operating activities		177000
Cash Flows from Investing Activities:
Purchase of Equipment	-80000
Sale of Land	39000
Net Cash used by Investing Activities		-41000
Cash Flows from Financing Activities
Payment of Cash Dividends	-40000
Redemption of Bonds Payable	-50000
Net Cash Used by Financing Activities		-90000
Net Increase in Cash		46000
Cash at Beginning of Period		22000
Cash at End of Period		68000

ekkarill92 answered 1 year ago

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