E5-16 solution - EXERCISE516(2025minutes(a ShabbonaCorporation ,2014 Netincome activities Depreciationexpense.$27,000 Increasei

E5-16 solution - EXERCISE516(2025minutes(a...

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EXERCISE 5-16 (20–25 minutes) (a) Shabbona Corporation Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities       Net income ................................................................ $125,000       Adjustments to reconcile net income          to net cash provided by operating           activities:             Depreciation expense .......................................... $27,000             Increase in accounts receivable .......................... (16,000)             Decrease in inventory .......................................... 9,000             Decrease in accounts payable ............................  (13,000 )       7,000       Net cash provided by operating activities .................. 132,000 Cash flows from investing activities       Sale of land ............................................................... 39,000       Purchase of equipment .............................................  (60,000 )       Net cash used by investing activities ......................... (21,000) Cash flows from financing activities       Payment of cash dividends .......................................    (60,000 ) Net increase in cash ........................................................ 51,000 Cash at beginning of year
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