Question

Question 1 Incorrect Mark 0.00 out of 1.00 Remove flag Cash Flow from Operating Activities Using the information for the Melville Corporation, calculate the cash flow from operating activities. Accounts payable increase $12,000 Accounts receivable increase 4,000 Accrued liabilities decrease 5,000 Amortization expense 7,000 Cash balance, January 1 22,000 Cash balance, December 31 23,000 Cash paid as dividends 31,000 Cash paid to purchase land 90,000 Cash paid to retire bonds payable at par 60,000 Cash received from issuance of common stock 37,000 Cash received from sale of equipment 19,000 Depreciation expense 29,000 Gain on sale of equipment 4,000 Inventory decrease 13,000 Net income 80,000 Prepaid expenses increase 2,000 Use a negative sign with answer to show cash outflow from (used by) operating activities. Cash flow from (or used by) operating activities: $ (80,000)

Answer 1

Solution

Melville Corporation

Cash flow from operations:

Melville Corporation
Cash flow from the operating activities:
Net Income		$80,000
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$29,000
Gain on sale of equipment	($4,000)
Amortization expense	$7,000
Accounts receivable increase	($4,000)
Accounts payable increase	$12,000
Accrued liabilities decrease	($5,000)
Inventory decrease	$13,000
prepaid expenses increase	($2,000)	$46,000
Cash flow from the operating activities:		$126,000