For the most recent accounting year, a company reported the following operating
ID: 2357362 • Letter: F
Question
For the most recent accounting year, a company reported the following operating and cash activities: Investments in other companies (8,628) Increase in inventories (2,685) Depreciation and amortization 35,254 Long-term debt repayment (165,243) Net income 28,961 Proceeds from issuance of common stock 13,485 Proceeds from sale of property and equipment 3,590 Payment of dividends (6,255) Proceeds from long-term debt issuance 61,785 Purchases of property and equipment (25,400) Decrease in accounts receivable 5,291 Decrease in accounts payable (8,466) Requirements: 1. Prepare the operating, investing and financing sections of the cash flow statement. 2. Explain the major sources and uses of cash for the year.Explanation / Answer
Cash flows from operating activities
Net income
28,961
adjustments to net income
depreciation and amortization
35,254
Decrease in AR
5,291
Increase in inventory
-2,685
Decrease in AP
-8,466
net cash provided by operating activities
58,355
Cash flows from investing activities
investments in other companies
-8,628
sale of property, plant and equipment
3,590
purchase of property, plant and equipment
-25,400
net cash provided by investing activities
-30,438
Cash flows from financing activities
long term debt repayment
-165,243
sale of common stock
13,485
payment of dividends
-6,255
proceeds from long-term debt issue
61,785
net cash provided by financing activities
-96,228
Major sources: Operations, issuing long term debt, sales of common stock, and sale of property, plant and equipment
Major uses: payment of long-term debt, purchase of property, plant, and equipment, investment in other companies, and payment of dividends
Cash flows from operating activities
Net income
28,961
adjustments to net income
depreciation and amortization
35,254
Decrease in AR
5,291
Increase in inventory
-2,685
Decrease in AP
-8,466
net cash provided by operating activities
58,355
Cash flows from investing activities
investments in other companies
-8,628
sale of property, plant and equipment
3,590
purchase of property, plant and equipment
-25,400
net cash provided by investing activities
-30,438
Cash flows from financing activities
long term debt repayment
-165,243
sale of common stock
13,485
payment of dividends
-6,255
proceeds from long-term debt issue
61,785
net cash provided by financing activities
-96,228