Waterway Industries has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Waterway Industries for 2022 and 2021 are provided below.
BALANCE SHEETS | |||||||||||
12/31/22 | 12/31/21 | ||||||||||
Cash | $410000 | $ 194000 | |||||||||
Accounts receivable | 358000 | 215000 | |||||||||
Inventory | 386000 | 478000 | |||||||||
Property, plant and equipment | $610000 | $961000 | |||||||||
Less accumulated depreciation | (319000 | ) | 291000 | (302000 | ) | 659000 | |||||
$1445000 |
$1546000 |
||||||||||
Accounts payable | $ 176000 | $ 96000 | |||||||||
Income taxes payable | 350000 | 393000 | |||||||||
Bonds payable | 358000 | 600000 | |||||||||
Common stock | 215000 | 215000 | |||||||||
Retained earnings | 346000 | 242000 | |||||||||
$1445000 |
$1546000 |
INCOME
STATEMENT For the Year Ended December 31, 2022 |
|||||||||
Sales revenue | $8420000 | ||||||||
Cost of sales | 7153000 | ||||||||
Gross profit | 1267000 | ||||||||
Selling expenses | $601000 | ||||||||
Administrative expenses | 193000 | 794000 | |||||||
Income from operations | 473000 | ||||||||
Interest expense | 74000 | ||||||||
Income before taxes | 399000 | ||||||||
Income taxes | 97000 | ||||||||
Net income |
$ 302000 |
1. | Dividends for the year 2022 were $198000. | |
2. | During the year, equipment was sold for $241000. This equipment cost $350000 originally and had a book value of $291000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. | |
3. | All depreciation expense is in the selling expense category. |
The net cash provided (used) by financing activities is(242000). 50000. 198000. (440000).
Answer | |
The Correct answer is D : -$440,000 | |
Explanation | |
Redemption of Bonds payable ( 358000-600000) |
-$ 242,000 |
Cash paid for Dividends | -$ 198,000 |
Net cash provided (used) by financing activities | -$ 440,000 |
Waterway Industries has recently decided to go public and has hired you as an independent CPA....
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