Question

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Cash and cash equivalents Accounts receivable Inventory Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Total assets Ending Balance $ 61,000 51,200 68,700 180,900 186,000 62,000 124,000 $ 304,900 Beginning Balance $ 72,650 55,000 62,500 190, 150 175,000 43,750 131,250 $ 321,400 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total liabilities and stockholders' equity $ 40,000 31,200 75,000 87,500 71,200 $ 304,900 $ 71,200 36,700 62,500 75,000 76,000 $ 321,400 During the year, Ravenna paid a $7,500 cash dividend and it sold a piece of equipment for $3,750 that had originally cost $7,800 and had accumulated depreciation of $5,200. The company did not retire any bonds or repurchase any of its own common stock during the year.

Answer 1

Date :_ Cash flows statement Lash flow - Operating Activity A frismo A Retained earning (4800) ( Cash Dividend 7500 it frov. for Tax (ly) 31,200 33.950 4 Depreciation 23,450 t Gain on sule of eq. [!!so) Intti on bood 1250 working cap. Adjustment (t) Decrease in All Rec 360o o Increase in Inventory (620) - و م و م المبدع هذا et 4 7600 - Increase in Interest payable Cal/60 sue on bond Tax paid (36,700) - Cash flow from operating Activity 10,900 Investing Activity Purchase of equipment (18,600) sau of equipment 37508 isoso) Equiorment Alc bld 17500 Bank Clale) 3750 PA LALO 1150) Acc. Dep. 520 Banale rear 18,809 & orale (pur eld 18600 Tg4gsu Acc. Dep. Ale Equip 5200 bld 43750 Depruation 23 450 dd 6200g (Bali fig) 67204 I 67,200 (Balifig) 134950 aga 9 Income jogoo Income Tax payable +31,200 to Net Net Cash wed in operating activity a Gross Cash outflows = 18, 600 Net cash used in Investing activity = 15,050 9 (3)