Question

Given only, the following information, answer the questions below. Increases and Decreases represent the change from the prior year to the current year. (Note to you are not told what the change in cash was for the year. Also, this is a brand new company, retained earnings must be calculated.)

Increase in Accounts Receivable	15,000
Decrease in Inventory	8,000
Increase in Property Plant and Equipment	10,000
Decrease in Short –Term Investments	20,000
Decrease in Long-Term Bonds Payable	60,000
Increase in Accounts Payable	10,000
Increase in Retained Earnings	75,000
Increase in Common Stock	35,000
Decrease in Salaries Payable	14,000
Increase in Prepaid Expenses	5,000
Decrease in Unearned Revenue	20,000
Change in Accumulated Depreciation	0
Increase in Dividends Payable	1,000

Other Info: Equipment was sold in the current year with an original cost of $25,000 and a book value of $7,000 for cash proceeds of $14,000. Assume the decrease in Short-Term Investments was the sale of shares in another company for $17,000. The company declared a $5,000 cash dividend during the year. The company also issued $35,000 in company stock in exchange for a piece of equipment.

Please determine the cash flows generated from a)operating, b)investing, and c)financing activities.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.