Question

The changes in each balance sheet account for Carver Corporation during the year just completed are as follows:

	Increase			Decrease
Cash and cash equivalents	$	3,090
Accounts receivable	$	5,300
Inventory				$	6,600
Prepaid expenses	$	3,210
Long-term investments				$	17,680
Property, plant, and equipment	$	11,440
Accumulated depreciation	$	9,900
Accounts payable				$	8,400
Accrued liabilities	$	5,100
Bonds Payable				$	12,360
Common Stock	$	3,090
Retained Earnings	$	1,430

Carver Corporation's income statement for the year just ended shows the following:

Income Statement
Sales	$	365,570
Cost of goods sold		201,400
Gross margin		164,170
Selling and administrative expense		162,740
Net income	$	1,430

The company did not dispose of any property, plant, and equipment, buy any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. Carver Corporation uses the direct method to construct its statement of cash flows.

Required:

a. Determine the sales adjusted to the cash basis.

b. Determine the cost of goods sold adjusted to the cash basis.

c. Determine the selling and administrative expenses adjusted to a cash basis.

d. Determine the net cash provided by (used in) operating activities. (Negative amounts should be indicated by a minus sign.)

e. Determine the net cash provided by (used in) investing activities. (Negative amounts should be indicated by a minus sign.)

f. Determine the net cash provided by (used in) financing activities. (Negative amounts should be indicated by a minus sign.)

Answer 1