Question

The following information is related to Towson Company's fiscal year 2018.

            Income Statement:

                        Net Income                             $4,000,000

                        Depreciation Expense 300,000

                        Loss on Sale of Plant Assets 25,000

                        Interest Expense                             5,000

            Balance Sheet - 12/31/17: Increase (Decrease)

                        Accounts Payable decrease 50,000

                        Plant Assets - Purchased      250,000

                        Plant Assets - Disposals         (100,000)

                       

            Additional Information:

                        Common Stock exchanged for outstanding Long Term Notes Payable of $125,000

                        Dividends paid were $30,000

Use this information to determine Towson Company's Net Cash Flows from Operating Activities. If the amount is an outflow then enclose the amount with dollar sign inside of brackets ( ).

Answer 1

Answer:

Towson Company

Cash Flows from Operations:
Net Income		$4,000,000
Adjustments to Net Income:
Depreciation Expense	300,000
Loss on Sale of Plant Assets	25,000
Accounts Payable decrease	(50,000)	275,000
Net Cash Flows from Operating Activities		$4,275,000