Question

The Natural Company's cash balance at December 31, 2015, was $150,000. The following information was reported on the company statement of cash flows for 2015, fill in the table below to identify where each item belongs on the statement cash flow and if it is added or subtracted, then calculate the operating activities for the statement of cash flow.

		Identify the Section of the Statement of Cash Flow (Operating, Investing, Financing)	Add or Subtract?
Net Income	$360,000
Depreciation and Amortization	110,000
Increase in Accounts Receivable	58,000
Increase in Inventory	120,000
Decrease in Accounts Payable	40,000
Dividends Paid to Shareholders	25,000
Proceeds from the Sale of Common Stock	500,000
Repayment of Bonds Payable	200,000
Proceeds from Sale of Equipment with a book value of $84,000	50,000
Purchase of Land and Building	300,000

Answer 1

		Section of the Statement of Cash Flow	Add or Subtract?
Net income	360000	Operating	Add
Depreciation and amortization	110000	Operating	Add
Increase in accounts receivable	58000	Operating	Subtract
Increase in inventory	120000	Operating	Subtract
Decrease in accounts payable	40000	Operating	Subtract
Dividends paid to shareholders	25000	Financing	Subtract
Proceeds from the sale of common stock	500000	Financing	Add
Repayment of bonds payable	200000	Financing	Subtract
Proceeds from sale of equipment with a book value of $84000	50000	Investing	Add
Purchase of land and building	300000	Investing	Subtract

Cash flow from operating activities:
Net income	360000
Depreciation and amortization	110000
Increase in accounts receivable	-58000
Increase in inventory	-120000
Decrease in accounts payable	-40000
Net cash flow from operating activities	252000