Question

The following table shows cash flow data for Rocket Transport.

Cash dividend	$	86,000
Purchase of bus	$	45,000
Interest paid on debt	$	31,000
Sales of old equipment	$	78,000
Repurchase of stock	$	67,000
Cash payments to suppliers	$	101,000
Cash collections from customers	$	360,000

a. Find the net cash provided by or used in investing activities.

b. Find the net cash provided by or used in financing activities. (Negative amount should be indicated by a minus sign.)

c. Find the net increase or decrease in cash for the year.

Answer 1

Answer of Part a:

Net Cash provided by investing activities = Sale of Old Equipment – Purchase of Bus
Net cash Provided by investing activities = $78,000 - $45,000
Net Cash Provided by Investing Activities = $33,000

Answer of Part b:

Net Cash Used by Financing Activities = - (Repurchase of Stock + Cash Dividend + Interest Paid)
Net Cash Used by Financing Activities = -($67,000 + $86,000 + $31,000)
Net Cash Used by Financing Activities = -$184,000

Answer of Part c:

Cash Provided by Operating Activities = Cash Collections from Customers – Cash payments to suppliers
Cash Provided by Operating Activities = $360,000 - $101,000
Cash Provided by Operating Activities = $259,000

Net Increase or Decrease in Cash = Cash Provided by Operating Activities + Cash Provided by Investing Activities + Net Cash Used by Financing Activities
Net Increase or Decrease in Cash = $259,000 + $33,000 - $184,000
Net Increase or Decrease in Cash = $108,000