1.
Income Statement Data Selected Year-End Balance Sheet Data
Sales $72,000 Accounts receivable increase $8,000
Expenses Inventory decrease 3,000
Cost of goods sold 39,000 Salaries payable increase 600
Salaries expense 9,000
Depreciation expense 6,000
Net income $ 18,000
Prepare the operating activities section of the statement of cash flows for Hampton Company using the indirect method. (Amounts to
be deducted should be indicated with a minus sign.)
Cash flows from operating activities
Net income $18,000
Depreciation expense 6,000
Accounts receivable increase (8,000)
Inventory decrease 3,000
Salaries payable increase 600
Net cash provided by operating activities $19,600
Explanation Make accounts receivable increase a negative
2. Arundel Company disclosed the following information for its recent calendar year.
Income Statement Data Selected Year-End Balance Sheet Data
Revenues $105,000 Accounts receivable decrease $23,000
Expenses Purchased a machine for cash 20,000
Salaries expense 72,000 Salaries payable increase 24,000
Utilities expense 34,000 Other accrued liabilities decrease 15,000
Depreciation expense 31,200
Other expenses 8,600
Net loss $ (40,800)
Explanation Make other accrued liabilities negative
Net loss (40800)
Depreciation expense 31200
Decrease in accounts receivable 23000
Increase in salaries payable 24000
Decrease in other accrued liabilities 15000
Net cash provided by operating activities
3. a. Equipment with a book value of $82,000 and an original cost of $169,000 was sold at a loss of $31,000.
b. Paid $103,000 cash for a new truck.
c. Sold land costing $325,000 for $430,000 cash, yielding a gain of $105,000.
d. Long-term investments in stock were sold for $97,000 cash, yielding a gain of $16,250.
Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be
indicated with a minus sign.)
Cash flows from investing activities
Cash received from the sale of equipment $51,000
Cash paid for new truck (103,000)
Cash received from the sale of land 430,000
Cash received from the sale of long-term investments 97,000
Net cash provided by investing activities $475,000
Explanation: Cash received from sale of equipment = Book value − loss = $82,000 − $31,000 = $51,000
Make 103000 negative
