Question

Use the following information, taken from the Kentucky Company records for the next three questions:

Net Income $58,000

Depreciation Expense 8,000

Payment of Dividends 2,200

Increase in Accounts Receivable 1,400

Cash Receipts on Notes Receivable 6,000

Loss on Sale of 12000

Decrease in Inventories 2,000

Increase in Accounts Payable 2,700

Decrease in Prepaid Expenses 800

Acquisition of Equipment 24,000

Sale of Treasury Stock 13,600

Payment of Long-term Deb t9,000

Proceed from Sale of Land 42,000

  The net cash inflow from operating activities would be:

$70,100

$79,900

$82,100

$73,900

  The net cash inflow from investing activities would be:

$18,000

$12,000

$6,000

$24,000

  The net cash inflow from financing activities would be:

$4,600

$2,400

$8,400

$11,400

Answer 1

Answers

The net cash inflow from operating activities would be:$82,100

  The net cash inflow from investing activities would be:$18,000

  The net cash inflow from financing activities would be:$8,400

Working

Kentucky Company
Cash Flow Statement
A. Cash Flows from Operating Activity
Net Income		$         58,000.00
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense	$          8,000.00
Loss on sale	$        12,000.00
Changes in current operating assets and liabilities:
Increase in Accounts receivables	$        (1,400.00)
Decrease in Inventory	$          2,000.00
Increase in accounts payables	$          2,700.00
Decrease in prepaid expenses	$              800.00
		$         24,100.00
Net cash flow from Operating activities		$         82,100.00
B. Cash flows from Investing Activities
Purchase of Equipment	$     (24,000.00)
Sale of land	$        42,000.00
Net cash flow used for investing activities		$         18,000.00
C. Cash Flows from Financing activities
Proceeds from sale of treasury stock	$        13,600.00
Proceeds from notes receivables	$          6,000.00
Payment of long term debts	$        (9,000.00)
Cash paid for dividends	$        (2,200.00)
Cash flows from Financing activities		$           8,400.00
Net Increase (Decrease) in Cash [A+B+C]		$     1,08,500.00