BALANCE SHEETS 12/31/19 12/31/18 Cash $408,000 $192,000 Accounts receivable 360,000 216,000 Inventory 384,000 480,000 Property, plant and equipment $608,000 $960,000 Less accumulated depreciation (320,000) 288,000 (304,000) 656,000 $1,440,000 $1,544,000 Accounts payable $ 176,000 $ 96,000 Income taxes payable 352,000 392,000 Bonds payable 360,000 600,000 Common stock 216,000 216,000 Retained earnings 336,000 240,000 $1,440,000 $1,544,000 INCOME STATEMENT For the Year Ended December 31, 2019 Sales revenue $8,400,000 Cost of sales 7,152,000 Gross profit 1,248,000 Selling expenses $600,000 Administrative expenses 192,000 792,000 Income from operations 456,000 Interest expense 72,000 Income before taxes 384,000 Income taxes 96,000 Net income $ 288,000 The following additional data were provided: Dividends for the year 2019 were $192,000. During the year, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. All depreciation expense is in the selling expense category. Questions: 1. The net cash provided by operating activities using above (indirect method) is a. $408,000. b. $288,000. c. $240,000. d. $200,000. 2. The net cash provided (used) by investing activities using above is a. $(352,000). b. $48,000. c. $240,000. d. $(288,000).
BALANCE SHEETS
12/31/19 12/31/18
Cash $408,000 $192,000
Inventory 384,000 480,000
Property, plant and equipment $608,000 $960,000
Less
$1,440,000 $1,544,000
Accounts payable $ 176,000 $ 96,000
Income taxes payable 352,000 392,000
Bonds payable 360,000 600,000
Common stock 216,000 216,000
$1,440,000 $1,544,000
INCOME STATEMENT
For the Year Ended December 31, 2019
Sales revenue $8,400,000
Cost of sales 7,152,000
Gross profit 1,248,000
Selling expenses $600,000
Administrative expenses 192,000 792,000
Income from operations 456,000
Interest expense 72,000
Income before taxes 384,000
Income taxes 96,000
Net income $ 288,000
The following additional data were provided:
- Dividends for the year 2019 were $192,000.
- During the year, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
- All depreciation expense is in the selling expense category.
Questions:
1. The net cash provided by operating activities using above (indirect method) is
a. $408,000.
b. $288,000.
c. $240,000.
d. $200,000.
2. The net cash provided (used) by investing activities using above is
a. $(352,000).
b. $48,000.
c. $240,000.
d. $(288,000).
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