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Stacy Equipment Company for 20C:

  • Net income for the year 20C was $5,000.
  • Accounts receivable decreased $2,000,
  • Inventories increased $4,000
  • Accounts payable decreased $7,000.
  • Wages payable increased $1,000
  • Depreciation expense was $7,500.
  • A new service truck was purchased for $14,000.
  • Issued $30,000 common stock in exchange for a newequipment.
  • The company borrowed $18,000 on a two-year note from thebank.
  • Dividends of $7,000 were paid in cash.
  • The beginning cash balance was $10,000

How much is the net change in cash account during the year?

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Hubert Koch
Hubert KochLv2
28 Sep 2019

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Stacy Equipment Company for 20C:

  • Net income for the year 20C was $5,000.
  • Accounts receivable decreased $2,000,
  • Inventories increased $4,000
  • Accounts payable decreased $7,000.
  • Wages payable increased $1,000
  • Depreciation expense was $7,500.
  • A new service truck was purchased for $14,000.
  • Issued $30,000 common stock in exchange for a newequipment.
  • The company borrowed $18,000 on a two-year note from thebank.
  • Dividends of $7,000 were paid in cash.
  • The beginning cash balance was $10,000



1. Determine cash flows from operating activities using theindirect method

2. How much is cash flows from investing activities?

3. How much is cash flows from financing activities?

4. How much is the net change in cash account during theyear?

5. How much is the ending cash balance?

What would the statement of cash flows be with the followinginformation below?

year ended 12/31/13

Net income for the year 2013 was $5000.00. Accounts receivabledecreased $2000.00, inventories increased $4000.00, accountspayable decreased $7000, depreciation expense included in netincome was $8000.00. Land was sold for book value of $8000.00 and anew truck was purchased for $14000.00. company borrowed $18,000 ona two year bank note. dividends of $6000 were paid in cash.Preferred stock issued to retire $7000 of long term notes payable.Beginning cash balance was $22,000.00 and ending balance was$32,000.00

Question #1 (2 points) For the following account activities, indicate the adjustment to be made, if any, to cash flows in the operating section of the cash flow statement. Assume that the statement is prepared on the indirect method:

Is this correct?

(A) Increase net income (B) Decrease net income

(C) No adjustment (investing activity). (D) No adjustment (financing activity)

___A__1. Accounts receivable decreased by $5,000 from last year to this year.

___A__2. Depreciation was $30,000.

___A__3. Prepaid Expenses decreased $10,000.

___A__4. Accounts Payable increased $20,000.

__B___5. Merchandise inventory decreased by $15,000.

___C__6. Office furniture increased $8,000.

___C__7. Sold a building at a gain of $5,000.

___D__8. Issued a cash dividend.

__A___9. Amortization of intangible assets was $10,000.

__D___10. Purchased 100 shares of Google common stock for $15,000.

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