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Momber's Flooring Company 2011 2012 Cash            500            800 Accounts receivable        1,400 &

Momber's Flooring Company
2011 2012
Cash            500            800
Accounts receivable        1,400        1,200
Inventory        3,900        4,400
Net fixed assets        8,200        8,200
Land        1,000        2,000
Total Assets      15,000      16,600
        
Notes payable        1,000            600
Accounts payable        3,000        2,000
Accruals            500            900
Long-term debt        3,600        5,400
Common Stock        2,500        2,200
Retained earnings        4,400        5,500
Total Liabilities and Equity      15,000      16,600

Given the Balance Sheets for Momber's Flooring Company above for the years ending December 31, 2011 and 2012, find Net Cash Flows from Investing Activities for 2012 assuming the following income statement data:

Net income (2012) = $ 4,210 and Depreciation (2012) = $ 1,605

Round your answer as a whole number and record without a dollar sign and without commas. For example, record $3,204.854 as 3205. To show a negative cash flow (i.e., a net cash outflow), place a negative sign before your answer with no space between the negative sign and the number. Thus, record negative 5,432 as -5432.

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Answer #1

Cash flow from investment activities is the cash flow related to non-current assets.

Given,

Net fixed assets for 2011= $8,200

Net fixed assets for 2012= $8,200

Depreciation for 2012= $1,605

Therefore, Cash flow for year 2012 due to fixed assets= 8200-8200+1605 = -$1,605

Also given,

Value of land for 2011= $1,000

Value of land for 2012= $2,000

Therefore, cash flow for land during year 2012= 1000-2000 = -$1,000

Cash flow from investment activities= -1605 – 1000 = -2605   (negative or net cash outflow)

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