Question

A comparative balance sheet for Talkington Corporation is presented below.

	December 31
Assets	2017		2016
Cash
Accounts receivable	$ 68,100		$ 21,600
Inventory	82,800		33,000
Land	170,200		83,800
Equipment	71,400		74,000
Accumulated depreciation–equipment	280,500		212,400
Total	(74,000)		(42,000)
	$597,000		$545,000
Liabilities and Stockholders’ Equity
Accounts payable	$ 34,000		$ 47,000
Bonds payable	150,000		200,000
Common stock ($1 par)	164,000		164,000
Retained earnings	249,000		134,000
Total	$597,000		$545,000

Additional information:

1.   Net income for 2017 was $155,000; there were no gains or losses.

2.   Cash dividends of $400,000 were declared and paid.

3.   Bonds payable of $50,000 were retired.

Instructions:

Compute each of the following in detail:

1.   Net cash provided by operating activities

2.   Net cash provided (used) by investing activities

3.   Net cash provided (used) by financing activities

Answer 1

S 113,800 S (83,800) $(450,000) 1 Net cash flow Provided by operating activities 2 Net cash flow used by investing activities 3 Net cash flow Used by financing activities Talkington Corporation Statement of Cash Flows For year Ended December 31, 2017 Cash flows from operating activities Net Income Adjustments to reconcile Net Income to Net Cash provided by Operating activities Depreciation Expenses Increase in Accounts Receivables Increase in Inventory Decrease in Accounts payable Net cash flow Provided by operating activities 155,000 68,100 $ (46,500) (49,800) (13,000 $ $ (41,200) 113,800 Cash flows from investing activities Purchase of land Sale of Equipment Net cash flow used by investing activities (86,400) 2,600 $ (83,800) Cash flows from Financing activities: Repayment of OF Bonds Payable Payment of Cash Dividends Net cash flow Used by financing activities $ (50,000) (400,000) (450,000) GA