Question
In: Accounting
Manning Tint, Inc. uses the indirect method to prepare its statement of cash flows. Refer to...
Manning Tint, Inc. uses the indirect method to
prepare its statement of cash flows. Refer to the following portion
of the comparative balance sheet:
Manning Tint, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
2016
2015
Increase/(Decrease)
Cash
$28,000
$25,000
$3,000
Accounts Receivable
34,000
36,000
(2,000)
Merchandise Inventory
53,000
26,000
27,000
Plant and Equipment
126,000
94,000
32,000
Accumulated
Depreciationminus−Plant
and Equipment
(45,000)
(44,000)
(1,000)
Total Assets
$196,000
$137,000
$59,000
Additional information provided by the company includes the following:
1. Equipment was purchased for $68,000.
2. Equipment with a cost of $36,000 and accumulated depreciation of $7,400 was sold for $50,000.
What was the amount of net cash provided by (used for) investing activities?
A.
$18,000
B.
$177,000
C.
$(177,000)
D.
$(18,000
Solutions
Expert Solution
Solution
Answer is D. ($18,000)
Computations:
Determination of the amount of net cash provided by (used for) investing activities:
Purchase of equipment ($68,000) Cash outflow
Sale of equipment $50,000 cash inflow
Net cash used by investing activities = ($18,000)
The plant and equipment book value -
Beginning balance $94,000
Less: Sale of equipment ($36,000)
Add: Purchase of equipment $68,000
Ending balance $126,000
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