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ACC 230 Week 5 Checkpoint Preparing a Statement of Cash Flows

ACC 230 Week 5 Checkpoint Preparing a Statement of Cash Flows

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Statement of cash flows (Indirect method) Little Bit Inc. Particulars Amount Amount Cash flows from operating activities: Net Income Before Interest and taxes 8,300 Add depreciation 18,000 Net Income before working capital changes 26,300 Adjustments for working capital changes: Less Increase in Accounts receivables -6,500 Less Increase in Inventories -8,500 Less Increase in prepaid expenses -4,000 Add Increase in Accounts payable 2,000 Less Decrease in Accrued liabilities -16,000 Less Taxes paid (3,500 + 800 - 4,000) -300 Cash used in operating activities -7,000 Cash flows from Investing activities: Purchase of Plant and equipment -6,000 Purchase of Investments -1,000 Cash used in Investing activities -7,000 Cash flows from Financing activities: Long term debt raised 17,000 Issue of Common Stock 15,000 Interest paid -2,000 Cash flows from Financing activities 30,000 Net Increase in Cash and cash equivalents 16,000 Beginning cash and cash equivalents 24,000 Ending cash and cash equivalents 40,000 The net cash from operative activities shows a negative figure of $7000. This means that no cash has been raised from the operating activities.
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