Harlan Mining Co. 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 Harlan Mining Co. for 2015 and 2014 are provided below.   BALANCE SHEETS                                                12/31/15                         12/31/14 Cash                                      $306,000                      $144,000 Accounts receivable               270,000                         162,000 Inventory                                 288,000                         360,000 PPE                  $456,000                          $720,000 Less: acc. dep.(240,000)      216,000      (228,000)   492,000                                            $1,080,000                      $1,158,000   Accounts payable                 $ 132,000                       $  72,000 Income taxes payable             264,000                         294,000 Bonds payable                         270,000                         450,000 Common stock                         162,000                         162,000 Retained earnings                    252,000                         180,000                                                $1,080,000                   $1,158,000   INCOME STATEMENT For the Year Ended December 31, 2015 Sales revenue                                          $6,300,000 Cost of sales                                             (5,364,000) Gross profit                                                    936,000 Selling expenses               $450,000 Administrative expenses      144,000           (594,000) Income from operations                                  342,000 Interest expense                                              (54,000) Income before taxes                                        288,000 Income taxes                                                    (72,000) Net income                                                   $  216,000   The following additional data were provided: 1.Dividends for the year 2015 were $144,000. 2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 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. Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company.   2. The Net Cash provided (used) by investing activites is  a. $(264,000). b. $36,000. c. $180,000. d. $(216,000).

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Harlan Mining Co. 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 Harlan Mining Co. for 2015 and 2014 are provided below.

 

BALANCE SHEETS

                                               12/31/15                         12/31/14

Cash                                      $306,000                      $144,000

Accounts receivable               270,000                         162,000

Inventory                                 288,000                         360,000

PPE                  $456,000                          $720,000

Less: acc. dep.(240,000)      216,000      (228,000)   492,000

                                           $1,080,000                      $1,158,000

 

Accounts payable                 $ 132,000                       $  72,000

Income taxes payable             264,000                         294,000

Bonds payable                         270,000                         450,000

Common stock                         162,000                         162,000

Retained earnings                    252,000                         180,000

                                               $1,080,000                   $1,158,000

 

INCOME STATEMENT

For the Year Ended December 31, 2015

Sales revenue                                          $6,300,000

Cost of sales                                             (5,364,000)

Gross profit                                                    936,000

Selling expenses               $450,000

Administrative expenses      144,000           (594,000)

Income from operations                                  342,000

Interest expense                                              (54,000)

Income before taxes                                        288,000

Income taxes                                                    (72,000)

Net income                                                   $  216,000

 

The following additional data were provided:

1.Dividends for the year 2015 were $144,000.

2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 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.

Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company.

 

2. The Net Cash provided (used) by investing activites is 

a. $(264,000).

b. $36,000.

c. $180,000.

d. $(216,000).

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