Question

The following is a statement of cash flows for the Tombstone Company. Answer the questions about this financial statement that follow.

Tombstone Company
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities:
	Net Income		34,682
	Reconciliation items:
		Increase in Accounts Receivable	(3,336)
		Decrease in Merchandise Inventory	13,698
		Increase in Accounts Payable	29,544
		Decrease in Income Taxes Payable	(630)
		Depreciation Expense	38,540
		Loss on sale of plant assets	10,080
		Gain on sale of investments	(11,698)
	Net cash provided by operating activities			110,880
Cash flows from investing activities:
	Cash received from sale of plant assets		2,520
	Cash received from sale of long-term investments		12,298
	Cash paid for purchase of plant assets		(92,758)
	Net cash used in investing activities			(77,940)
Cash flows from financing activities:
	Cash received from issuing stock		30,000
	Cash paid for dividends		(40,320)
	Cash paid to retire bonds payable		(20,700)
	Net cash used in financing activities			(31,020)
Net increase in cash				1,920
Cash balance at prior year-end				27,648
Cash balance at current year-end				29,568

What method do the use to report operating cash flows? Fill in the blank with either direct method or indirect method.

Did they sell any plant assets for cash? Fill in the blank with either yes or no.

Did they purchase any plant assets for cash? Fill in the blank with yes or no.

Did they purchase any investments for cash? Fill in the blank with yes or no.

Did they sell any investments for cash? Fill in the blank with yes or no.

Did they pay any cash dividends? Fill in the blank with yes or no.

Did they issue any new stock for cash? Fill in the blank with yes or no.

Did they buy any treasury stock for cash? Fill in the blank with yes or no.

Did they pay off any bonds payable? Fill in the blank with yes or no.

Did they receive any cash to pay off a note receivable? Fill in the blank with yes or no.

Answer 1

What method do the use to report operating cash flows?	Indirect	Under indirect method only cash flow from operating activities will calculate by adjust non cash activities with net income
Did they sell any plant assets for cash?	Yes	Under investing activities, we can see cash received from sale of plant assets
Did they purchase any plant assets for cash?	Yes	Under investing activities, we can see cash paid for purchase of plant assets
Did they purchase any investments for cash?	No
Did they sell any investments for cash?	Yes	Under investing activities, we can see cash received from sale of long term investments
Did they pay any cash dividends?	Yes	Under financing activities, we can see cash paid for dividends
Did they issue any new stock for cash?	Yes	Under financing activities, we can see cash received from issuance of common stock
Did they buy any treasury stock for cash?	No
Did they pay off any bonds payable?	Yes	Under financing activities, we can see cash paid to retire bonds
Did they receive any cash to pay off a note receivable?	No

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