Chapter 23, Problem 16E

To determine

Introduction: Cash flow statement provides information about the cash inflows and outflows during a given period of time.

Cash flow from operating activities includes cash effects of transactions that determine net income.

Cash flow from investing activities includes procuring and recovering loan amount, acquisition and disposal of property, plant and equipment and investments.

Cash flow from financing activities includes cash effects of transactions which involve owner’s equity and liabilities.

To determine the net cash provided (used) by operating activities, investing activities, and financing activities.

Given Information: The balance sheet data at the end of 2017 and 2016 is as follows.

Comparative Balance sheet as on December 31	2017 ($)	2016 ($)
Cash	30,000	35,000
Accounts receivable (net)	55,000	45,000
Inventory	65,000	45,000
Prepaid expenses	15,000	25,000
Equipment	90,000	75,000
Accumulated depreciation—equipment	(18,000)	(8,000)
Land	70,000	40,000
Total Assets	307,000	257,000
Accounts payable	65,000	52,000
Accrued expenses	15,000	18,000
Notes payable—bank, long-term	0	23,000
Bonds payable	30,000	0
Common stock $10 par	189,000	159,000
Retained earnings	8,000	5,000
Total Liabilities and Stockholders’ Equity	307,000	257,000