Question

The following information were extracted from its financial statements of Avatar Corporation:

Net Loss	($15,800)
Depreciation	$25,300
Issuance of bonds payable	$31,400
Payment of dividend	$5,300
Purchase of equipment	$1,200,000
Sale of equipment	$320,000
Increase in inventory	$12,000
Issuance of common stock	$28,000
Loss on sale of equipment	$42,000
Purchase of treasury stock	$38,000
Increase in accounts payable	$14,000
Increase in accounts receivable	$9,000
Decrease in accrued liability	$1,000

Required:

Prepare a statement showing the computation of the company’s net cash flow provided by operating activities from the above information

2. Prepare a statement showing the computation of the company’s net cash flow provided by financing activities from the above information.

Answer 1

net cash flow provided by operating activities
net loss					-15,800
Adjustments to reconcile net income
Depreciation expense					25,300
loss on sale of Equipment					42,000
increase in inventory					-12,000
increase in accounts payable					14,000
increase in accounts receivable					-9,000
Decrease in accrued liability					-1,000
net cash flow provided by operating activities					43,500
Net cash provided by financing activities
issuance of bonds payable					31,400
payment of dividend					-5,300
issusance of common stock					28,000
purchase of treasury stock					-38,000
Net cash provided by financing activities					16,100