Question

Magnolia Inc.’s balance sheet and income statement are as follows:

Balance Sheet	January 1	December 31
Assets:
Cash	$ 22	$ 23
Accounts receivable	40	39
Inventory	44	43
Property, plant, & equipment	500	587
Less accumulated depreciation	(347)	(359)
Total	$259	$333
Liabilities and stockholders’ equity:
Accounts payable	$ 26	$ 30
Accrued liabilities	18	15
Income taxes payable	40	39
Bonds payable	120	109
Common stock	50	51
Retained earnings	5	89
Total	$259	$333

Income Statement
Sales	$ 972
Cost of goods sold	(620)
Gross margin	352
S&A expenses	(200)
Operating income	152
Gain on sale of equipment	14
Income before taxes	166
Income taxes	(50)
Net income	$ 116

Magnolia sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. Magnolia paid a cash dividend and did not issue any bonds payable or repurchase any of its own common stock. Magnolia uses the indirect method to prepare its statement of cash flows. What is Magnolia’s net cash provided by (used in) operating activities?

Answer 1