Karr Inc. reported net income of $300,000 for 20X1. Changes occurred in several balance sheet accounts as follows: Equipment Accumulated depreciation Note payable $25,000 increase 40,000 increase 30,000 increase Additional Information: a. During 20X1, Karr sold equipment that cost $25,000 and had accumulated depreciation of $12,000, for a gain of $5,000. b. In December 20X1, Karr purchased equipment costing $50,000 with $20,000 cash and a 12% note payable of $30,000. c. Depreciation expense for the year was $52,000. Required: 1. In Karr's 20X1 statement of cash flows, what should be the net cash from operating activities? 2. In Karr's 20X1 statement of cash flows, what should be the net cash used in investing activities?
Karr Inc. reported net income of $300,000 for 20X1. Changes occurred in several balance sheet accounts as follows: Equipment Accumulated depreciation Note payable $25,000 increase 40,000 increase 30,000 increase Additional Information: a. During 20X1, Karr sold equipment that cost $25,000 and had accumulated depreciation of $12,000, for a gain of $5,000. b. In December 20X1, Karr purchased equipment costing $50,000 with $20,000 cash and a 12% note payable of $30,000. c. Depreciation expense for the year was $52,000. Required: 1. In Karr's 20X1 statement of cash flows, what should be the net cash from operating activities? 2. In Karr's 20X1 statement of cash flows, what should be the net cash used in investing activities?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Karr Inc. reported net income of $300,000 for 20X1. Changes occurred in several balance sheet accounts as follows:
Equipment
Accumulated depreciation:
Note payable
$25,000 increase
40,000 increase
30,000 increase
Additional Information:
a. During 20X1, Karr sold equipment that cost $25,000 and had accumulated depreciation of $12,000, for a gain of $5,000.
b. In December 20X1, Karr purchased equipment costing $50,000 with $20,000 cash and a 12% note payable of $30,000.
c. Depreciation expense for the year was $52,000.
Required:
1. In Karr's 20X1 statement of cash flows, what should be the net cash from operating activities?
2. In Karr's 20X1 statement of cash flows, what should be the net cash used in investing activities?
(For all requirements, cash outflows should be entered with a minus sign.)
1. Net cash from operating activities
2. Net cash used in investing activities
$
$
370,000
(2,000)
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