Question

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

            Income Statement:

                        Net Income                             $4,000,000

                        Depreciation Expense 550,000

                        Loss on Sale of Plant Assets 25,000

                        Interest Expense                             5,000

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

                        Accounts Payable decrease 40,000

                        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

Towson Company
Cashflow Statement - partial
Foe the Fiscal Year Ended 2018
Cash flows from Operating Activities
Net income	4,000,000
Adjustments to reconcile net income to net cash from operating activities
Depreciation expense	550,000
Loss on Sale of Plant Assets	25,000
Changes in Working Capital
Accounts Payable decrease	(40,000)
Net Cash Provided/(Used) by Operating Activities	4,535,000
Note - Decrease in current liabilties decreases cash