Question

Marin Beverage Company reported the following items in the most recent year.

Net income		$43,000
Dividends paid		5,650
Increase in accounts receivable		10,850
Increase in accounts payable		7,220
Purchase of equipment (capital expenditure)		8,930
Depreciation expense		4,220
Issue of notes payable		24,120

Compute net cash provided by operating activities, the net change in cash during the year. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

MARINE BEVERAGE COMPANY
Statement of Cash Flows
		Amount ($)
Cash flows from operating activities;
Net Income		43,000
Adjustments to reconcile net income to Net cash provided by operating activities
Depreciation Expenses	4,220
Increase in Accounts Receivables	-10,850
Increase in Accounts payable	7,220	590
Net cash provided by operating activities		43,590
Cash flows from investing activities:
Purchase of Equipment	-8,930
Net cash used by investing activities		-8,930
Cash flows from financing activities:
Issue of Note Payable	24,120
Dividends paid	-5,650
Net cash Provided by financing activities		18,470
Net Increase in cash		53,130

(1)-Net cash provided by operating activities = $43,590

(2)-Net change in cash during the year (Net Increase in cash) = $53,130