Question

Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:...

Comparative consolidated balance sheet data for Iverson, Inc., and its 80 percent–owned subsidiary Oakley Co. follow:

2018 2017
Cash $ 5,250 $ 13,050
Accounts receivable (net) 38,800 26,500
Merchandise inventory 96,850 48,250
Buildings and equipment (net) 105,100 117,000
Trademark 109,000 125,500
Totals $ 355,000 $ 330,300
Accounts payable $ 89,000 $ 75,000
Notes payable, long-term 0 31,300
Noncontrolling interest 55,200 48,000
Common stock, $10 par 200,000 200,000
Retained earnings (deficit) 10,800 (24,000 )
Totals $ 355,000 $ 330,300

Additional Information for Fiscal Year 2018

  • Iverson and Oakley’s consolidated net income was $53,000.
  • Oakley paid $5,000 in dividends during the year. Iverson paid $10,000 in dividends.
  • Oakley sold $14,400 worth of merchandise to Iverson during the year.
  • There were no purchases or sales of long-term assets during the year.

In the 2018 consolidated statement of cash flows for Iverson Company:

Net cash flows from operating activities were

Multiple Choice

  • $28,000.

  • $18,500.

  • $34,500.

  • $14,000.

Homework Answers

Answer #1

Answer- Net cash flows from operating activities were =$34500.

Explanation-

IVERSON INC.
STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,2018
Particulars Amount
$
Cash flow from operating activities
Net Income 53000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Amortization expense-Trademark 16500
Depreciation expense 11900
Change in operating assets & liabilities
Increase in accounts receivable -12300
Increase in inventory -48600
Increase in accounts payable 14000
Net cash flow from operating activities 34500
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