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Denton Corp.’s statement of financial position accounts as at 31 December 20X4 and 20X5 and information relating to 20X5 activities are presented below.

Denton Corp.’s statement of financial position accounts as at 31 December 20X4 and 20X5 and information relating to 20X5 activities are presented below.

 

Information relating to 20X5 activities:
• Net earnings for 20X5 were $690,000.
• Cash dividends were declared and paid in 20X5.
• Equipment costing $400,000 and having a net book value of $150,000 was sold for $150,000.
• A long-term investment was sold for $135,000. There were no other transactions affecting long-term investments in the year.
• Short-term investments consist of treasury bills with an original term of three months.

 

Required:

Determine the following amounts for Denton for the year 20X5:

1. Net cash from operating activities (indirect method)

2. Net cash from investing activities

3. Net cash from financing activities

Solutions

Expert Solution

DENTON CORPORATION

Statement of Cash Flows

For the year ended 31 December 20x5

 

 

Assumed: short-term bank debt is not an overdraft and thus is not included in the cash definition.

 

*    Accumulated depreciation 20x5..............................................        $450,000

      Accumulated depreciation on equipment sold........................     + 250,000

      Less: Accumulated depreciation 20x4.....................................        - 450,000

      Depreciation expense...............................................................       $ 250,000

 

**  Equipment 20x5.......................................................................     $1,700,000

      Cost of equipment sold............................................................          400,000

      Less: equipment 20x4..............................................................     - 1,000,000

  Purchase of equipment.............................................................     $1,100,000

Junaid answered 7 months ago
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