Question

In: Accounting

Following is information provided about Acme United Company (and note the flow of time, from left...

Following is information provided about Acme United Company (and note the flow of time, from left to right):

  12/31/17           12/31/18

            Cash $   2,000 $ 4,000

            Accounts receivable                                            10,000             18,000

            Machinery 100,000           120,000

            Accumulated depreciation (40,000)           (45,000)

            Total Assets                                                     $ 72,000           $ 97,000

            Accounts payable                                            $   3,000           $   1,000

            Income taxes payable                                          15,000               3,000

            Finance leases                                                     20,000             30,000

            Common stock                                                      1,000             10,000

            Retained earnings                                                33,000             53,000

            Total liabilities and equity     $ 72,000           $ 97,000

Other information (for the year ended 12/31/18):

            Net income                                                                              $25,000

            Depreciation expense                                                                   5,000

Required: [Note: You do not need to complete B and C, if you do, there may be some yet to be determined extra credit.]

  1. Calculate cash flow provided by or used in operating activities. (Cash inflow or outflow.) Show your work and if you need to make any assumptions, identify those assumptions (hint: you’ll need to make assumptions). Use the indirect method only.
  1. Based only on the information provided, calculate cash flow used in or provided by financing activities. Show your work!
  1. Based only on the information provided, calculate cash flow use in or provided by investing activities. Show your work!

Solutions

Expert Solution

A. Net Cash flow from operating activity = $ 8000

B. Net Cash used in investing activity = $ 20000

C. Net cash from financing activity = $ 14000

ekkarill92 answered 1 year ago
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