Question

In: Accounting

Krech Corporation's comparative balance sheet appears below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Current...

Krech Corporation's comparative balance sheet appears below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Current assets: Cash and cash equivalents $ 39,000 $ 29,300 Accounts receivable 22,000 28,000 Inventory 74,000 68,000 Prepaid expenses 13,600 10,800 Total current assets 148,600 136,100 Property, plant, and equipment 470,000 450,000 Less accumulated depreciation 235,000 202,500 Net property, plant, and equipment 235,000 247,500 Total assets $ 383,600 $ 383,600 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 25,800 $ 17,000 Accrued liabilities 60,000 73,000 Income taxes payable 87,000 89,000 Total current liabilities 172,800 179,000 Bonds payable 100,000 89,000 Total liabilities 272,800 268,000 Stockholders’ equity: Common stock 44,000 34,000 Retained earnings 66,800 81,600 Total stockholders’ equity 110,800 115,600 Total liabilities and stockholders' equity $ 383,600 $ 383,600 The company's net income (loss) for the year was $(7,400) and its cash dividends were $7,400. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. The company's net cash provided by (used in) operating activities is: Garrison 16e Rechecks 2017-11-21 Multiple Choice $16,100 $30,900 $17,700 $36,900

Solutions

Expert Solution

  • Correct Answer = Option #1: $ 16,100
  • Working

No.

Conceptual Notes

1

Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.

2

Effects of Non - Cash Transaction are adjusted from Net Income.

3

Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.

4

Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income

5

Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income

Net Income (Loss)

$                       (7,400)

Decrease in Accounts receivables [28000 - 22000]

$                         6,000

Increase in Inventory [74000 - 68000]

$                       (6,000)

Increase in Prepaid Expenses [13600 - 10800]

$                       (2,800)

Depreciation Expense [235000 - 202500]

$                       32,500

Increase in Accounts Payable [25800 - 17000]

$                         8,800

Decrease in Accrued Liabilities

$                     (13,000)

Decrease in Income taxes payable

$                       (2,000)

Net Cash provided by (used in) operating activities

$                       16,100 = Answer

ekkarill92 answered 1 year ago
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