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:

	Ending Balance			Beginning Balance
Cash and cash equivalents	$	102,000		$	122,400
Accounts receivable		81,700			88,000
Inventory		109,700			100,000
Total current assets		293,400			310,400
Property, plant, and equipment		291,000			280,000
Less accumulated depreciation		97,000			70,000
Net property, plant, and equipment		194,000			210,000
Total assets	$	487,400		$	520,400
Accounts payable	$	64,000		$	113,700
Income taxes payable		49,700			65,700
Bonds payable		120,000			100,000
Common stock		140,000			120,000
Retained earnings		113,700			121,000
Total liabilities and stockholders’ equity	$	487,400		$	520,400

During the year, Ravenna paid a $12,000 cash dividend and it sold a piece of equipment for $6,000 that had originally cost $13,800 and had accumulated depreciation of $9,200. The company did not retire any bonds or repurchase any of its own common stock during the year.

13. What is the company’s net cash provided by (used in) investing activities?

14. What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?

15. What is the company’s net cash provided by (used in) financing activities?

Answer 1

Requirement 13
Cash flow form Investing activities
Purcahse of property, palnt and equipment for cash	-24,800
Sale of equipment for cash	6,000
Net cash used for investing activities	18,800
Requirement 14
Gross cash inflows reported in the financing section of the company's statement of cash flows
Issuance of Common stock for cash	20,000
Issuance of bonds payable in exchange for cash	20,000
Gross cash inflows reported in the financing section	40,000
Requirement 15
Cash flow from Financing Activities
Issuance of Common stock for cash	20,000
Issuance of bonds payable in exchange for cash	20,000
Payment of cash dividends	-12,000
Net cash provided by financing activities	28,000