A company had a $21,000 net loss from operations for 2016. Depreciation expenses for 2016 were $8,600 and a 2016 cash dividend of $6,000 was declared and paid. Balance of the current asset and liability accounts at the beginning and end of 2016 follow. Did the company's 2016 operating activity provide or use cash? Why or why not? Use the indirect method to determine the answer. Ending Beginning Cash $3,500 $7,000 Account Receivable $16,000 $25,000 Inventory $50,000 $53,000 Prepaid Expenses $6,000 $9,000 Accounts payable $12,000 $8,000 Accrued Liabilities $5,000 $7,500
A company had a $21,000 net loss from operations for 2016.
Did the company's 2016 operating activity provide or use cash? Why or why not?
Use the indirect method to determine the answer.
Ending Beginning
Cash $3,500 $7,000
Inventory $50,000 $53,000
Prepaid Expenses $6,000 $9,000
Accounts payable $12,000 $8,000
Accrued Liabilities $5,000 $7,500
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