Question

Financial statements of Rukavina Corporation follow:

Comparative Balance Sheet
	Ending Balance			Beginning Balance
Assets:
Cash and cash equivalents	$	57		$	55
Accounts receivable		81			86
Inventory		62			63
Property, plant, and equipment		526			500
Less accumulated depreciation		263			250
Total assets	$	463		$	454
Liabilities and stockholders' equity:
Accounts payable	$	113		$	89
Bonds payable		316			360
Common stock		95			94
Retained earnings		(61	)		(89	)
Total liabilities and stockholders' equity	$	463		$	454

Income Statement
Sales	$	660
Cost of goods sold		462
Gross margin		198
Selling and administrative expense		132
Net operating income		66
Income taxes		20
Net income	$	46

Cash dividends were $18. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.

The net cash provided by (used in) operating activities for the year was:

Answer 1

Cash flows from operating activities
Net Income		$ 46
Adjustments to reconcile net income to ;
Depreciation expense	$ 13
Changes in current operating assets and liabilities
Decrease in accounts receivable	$    5
Decrease in inventories	$    1
Increase in accounts payable	$ 24
		$ 43
Net cash provided by operating activities		$ 89

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