s) Keyser Beverage Company reported the following items in the most recent year. Net income Dividends paid Increase in accounts receivable Increase in accounts payable Purchase of equipment (capital expenditure) Depreciation expense Issue of common stocks $ 40,000 5,000 10,000 7,000 8,000 4,000 20,000 Compute (1) net cash provided by operating activities, and (2) the net change in cash during the year.
s) Keyser Beverage Company reported the following items in the most recent year. Net income Dividends paid Increase in accounts receivable Increase in accounts payable Purchase of equipment (capital expenditure) Depreciation expense Issue of common stocks $ 40,000 5,000 10,000 7,000 8,000 4,000 20,000 Compute (1) net cash provided by operating activities, and (2) the net change in cash during the year.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 27BE
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Question
Transcribed Image Text:s) Keyser Beverage Company reported the following items in the
2.
most recent year.
Net income
Dividends paid
Increase in accounts receivable
Increase in accounts payable
Purchase of equipment (capital expenditure)
Depreciation expense
Issue of common stocks
$ 40,000
5,000
10,000
7,000
8,000
4,000
20,000
Compute (1) net cash provided by operating activities, and (2) the net
change in cash during the year.
Expert Solution
Explanation -
Cash Flow Statement -
The Cash Flow Statement is the statement that shows the cash inflow and outflow of the company. This is a very important financial statement that shows the actual cash position of the company.
On the basis of cash flow from operating activities company decides whether to purchase fixed assets or repay debt, pay dividends if they have positive cash flow from operating activity.
Or else they can sell the assets or borrow funds by way of notes to increase the negative or low cash flow available in the business.
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