Question

-/8 Question 6 of 9 View Policies Current Attempt in Progress The balance sheet data of Whispering Company at the end of 2020 and 2019 are shown below. Cash Accounts receivable (net) Inventory Prepaid expenses Equipment Accumulated depreciation-equipment Land 2020 $29.900 55,400 64,800 15,100 89,600 (17.920) 70.100 $306,980 2019 $35.100 45,100 44,700 24,700 74,700 (8,000) 40,400 $256,700 Accounts payable Accrued expenses Notes payable-bank, long-term Bonds payable Common stock, $10 par Retained earnings $64.400 15,200 -0 29.900 189.300 8,180 $306,980 $52.400 18,100 22.800 -0- 159,600 3,800 $256.700 Land was acquired for $29,700 in exchange for common stock, par $29,700, during the year; all equipment purchased was for cash. Equipment costing $13,200 was sold for $3,000; book value of the equipment was $6,000. Cash dividends of $10,000 were declared and paid during the year. Compute net cash provided (used) by: (Show amounts that decrease cash flow with either a-sign eg.-12,000 or in parenthesis es. (12,000) (a) Net Cash $ 1 (b) Net Cash provided by operating activities. by investing activities. by financing activities. used $ (c) Net Cash used $ e Textbook and Media Save for Later Attempts: 0 of 4 used Submit Answer

Answer 1

Solution:

Whispering Company
Statement of Cash Flows
For year ended 2020
Particulars	Details	Amount
Cash Flow from Operating Activities:
Net Income ($8,180 + $10,000 - $3,800)	$14,380.00
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense ($17,920 -$8,000 + $7,200)	$17,120.00
Loss on sale of equipment	$3,000.00
Increase in accounts receivables ($55,400 - $45,100)	-$10,300.00
Increase in inventory ($64,800 - $44,700)	-$20,100.00
Decrease in prepaid expenses ($24,700 - $15,100)	$9,600.00
Increase in accounts payable ($64,400 - $52,400)	$12,000.00
Decrease in acccured expenses ($18,100 - $15,200)	-$2,900.00
Net Cash provided (Used) by operating activities		$22,800.00
Cash Flow from Investing Activities:
Purchase of equipment ($89,600 - $74,700 + $13,200)	-$28,100.00
Sale of equipment	$3,000.00
Net Cash Provided (Used) by Investing activities		-$25,100.00
Cash Flow from Financing Activities:
Dividend Paid	-$10,000.00
Repayment of Note payable	-$22,800.00
Proceed from issue of bond	$29,900.00
Net Cash Provided (used) by financing activities		-$2,900.00
Net Increase / (Decrease) in Cash		-$5,200.00
Cash balance at beginning of year		$35,100.00
Cash balance at end of year		$29,900.00
Non Cash investing and financing activities:
Land purchase by issue of common stock		$29,700.00