Question

The 2018 income statement and comparative balance sheet of Get Wired, Inc. follow: EEB (Click the icon to view the income statement) ell (Click the icon to view the comparative balance sheet.) Statement of Cash Flows Year Ended December 31, 2018 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities Net Cash Provided by (Used for) Operating Activities Cash Flows from Investing Activities Net Cash Provided by (Used for) Investing Activities Cash Flows from Financing Activities Net Cash Provided by (Used for) Financing Activities Net Increase (Decrease) in Cash Cash Balance, December 31, 2017 Cash Balance, December 31, 2018 Non-cash Investing and Financing Activities: Total Non-cash Investing and Financing Activities Requirement 2. How will what you learned in this problem help you evaluate an investment? O A. Learn how operating activities, investing activities, and financing activities generate cash receipts and cash payments OB. Learn how to predict future cash flows, evaluate management decisions, and predict the ability of the company to pay their debts and dividends O C. Both A and B OD. None of the above

Answer 1

Cash flows from operating activities		100,600.00
Net income
Adjustments for:
Depreciation and amortization		14,300.00
Increase in trade receivables		(1,900.00)
Decrease in inventories		12,700.00
Inecrease in trade payables		4,700.00
Decrease in accrued libility		(2,700.00)
Cash generated from operations		127,700.00
Cash flows from investing activities
Purchase of equipment		(17,500.00)	Note 2
Purchase of land		(19,600.00)	[$34600-15000]
Decrease in notes payable		(30,000.00)
Net cash used in investing activities		(67,100.00)
Cash flows from financing activities
Issue of common stock		24,300.00
Cash Dividend paid		(73,500.00)	Note 3
Net cash used in financing activities		(49,200.00)
Net increase in cash and cash equivalents		11,400.00
Cash and cash equivalents at beginning of period		15,000.00
Cash and cash equivalents at end of period		26,400.00
Non-cash investing and financing activities:
Disposal of plant asset at book value		14100	[Note 1]
Total non-cash investing and financing activities		14100
Total
Note 1:
Opening Value of Accumulated Depreciation	19780
Add: Depreciation Charged during the year	14300
Less: Closing Value of Accumulated Depreciation	19980
Value of Accumulated Depreciation of asset sold	14100
Note 2:
Closing Value of Plant Asset	117880
Less: Opening value of equipment	114480
Add: Depreciation of the asset sold (note 1)	14100
Cost of equipment purchased	17500
Note 3:
Opening Value of retained earnings	13200
Add: Profit for the year	100600
Less: Closing Value of Retained Earnings	40300
Dividend Paid	73500
Requirement 2:
Cash flow statement help us to A. Learn how operating activities, investing activities, and financing activities generate cash receipts and cash payments