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Answer of Chapter 16

Answer of Chapter 16 - PROBLEMS Prob 161A OAK AND TILE...

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PROBLEMS Prob. 16–1A OAK AND TILE FLOORING CO. Statement of Cash Flows For the Year Ended June 30, 2008 Cash flows from operating activities: Net income ...................................................... $ 65,900 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation ............................................... 7,300 Loss on sale of investments ..................... 5,000 Changes in current operating assets and liabilities: Increase in accounts receivable ............... (9,300) Increase in inventories .............................. (4,200) Increase in accounts payable ................... 5,700 Increase in accrued expenses .................. 1,800 Net cash flow from operating activities ........ $ 72,200 Cash flows from investing activities: Cash received from sale of investments ...... $ 45,000 Less: Cash paid for purchase of land ........... $145,000 Cash paid for purchase of equipment ........................................ 39,500 184,500 Net cash flow used for investing activities ........................................................ (139,500) Cash flows from financing activities: Cash received from sale of common stock.. $126,000 Less cash paid for dividends ......................... 47,500 * Net cash flow provided by financing activities ........................................................ 78,500 Increase in cash ................................................... $ 11,200 Cash at the beginning of the year ....................... 23,500 Cash at the end of the year ................................. $ 34,700 *$50,000 + $10,000 – $12,500 = $47,500 446
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Prob. 16–1A Concluded A B C D E OAK AND TILE FLOORING CO.
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