Question

Roland Corporation presented the following information which was extracted from its financial statements for the years 2016 ad 2015

net imcome	48,000
depreciation	18,000
issuance of bonds payable	44,000
payment of dividend	18,000
purchase of equipment	140,000
sale of equipment	74,000
increase in inventory	8,000
issuance of common stock	19,000
loss on sale of equipment	10,000
purchase of treasury stock	5,000
increase in accounts payable	5,000
increase in accounts receivable	3,000
decrease in accrued liability	5,000

Required:

1) prepare a statement showing the computation of the company's net cash flow provided by operating activities for the year ended December 31, 2016

2) prepare a statement showing the computation of the company's net cash flow provided by financing activities for the year ended 31, 2016

Answer 1

1	Roland Corporation
	Cash flow from operating activities
	Net Income		48,000
	Adjust to reconcile net income to
	Net cash provided by operating activities:
	Depreciation expense	18,000
	Loss on sale of equipment	10,000
	Increase in Accounts receivable	-3,000
	Increase in Inventories	-8,000
	Increase in Accounts Payable	5,000
	Decrease in accrued liability	-5,000
			17,000
	Net Cash provided by operating activities		65,000

2	Cash flow from financing activities
	Purchase of treasury stock	-5,000
	Proceeds from Bonds Payable	44,000
	Issuance of common stock	19,000
	Dividend Paid	-18,000
	Net Cash provided by financing activities		40,000