Charlotte Company\'s net income last year was $91,000. Changes in the company\'s
ID: 2360269 • Letter: C
Question
Charlotte Company's net income last year was $91,000. Changes in the company's balance sheet accounts for the year appear below:
The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend.
Construct in good form the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) (Negative amounts and amounts to be deducted should be indicated by a minus sign.)
Construct in good form the investing activities section of the company's statement of cash flows for the year. (Negative amounts and amounts to be deducted should be indicated by a minus sign.)
Construct in good form the financing activities section of the company's statement of cash flows for the year. (Negative amounts and amounts to be deducted should be indicated by a minus sign.)
Asset and Contra-Asset Accounts: Increases(Decreases) Cash $ (13,000) Accounts receivable $ 16,000 Inventory $ 21,000 Prepaid expenses $ (8,000) Long-term investments $ 30,000 Property, plant and equipment $ 60,000 Accumulated depreciation $ 36,000 Liability and Equity Accounts: Accounts payable $ (21,000) Accrued liabilities $ 14,000 Income taxes payable $ 42,000 Bonds payable $ (50,000) Common stock $ 20,000 Retained earnings $ 65,000
Explanation / Answer
Operating Activities: Net income 91,000 Adjustments Depreciation expense 36,000 Increase in accounts receivable -16,000 Increase in inventories -21,000 Decrease in prepaid expenses 8,000 Decrease in accounts payable -21,000 Increase in accrued liabilities 14,000 Increase in income taxes payable 42,000 Net cash flows provided from operating activities 1,33,000 Investing Activities: Purchase of long-term investments -30,000 Purchase of property, plant and equipment -60,000 Net cash flows used in investing activities -90,000 Financing Activities: Retirement of bonds payable -50,000 Cash dividends paid -26,000 Issuance of common stock 20,000 Net cash used in financing activities -56,000