Here is my problem:
Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:
Ending Balance Beginning Balance
Cash $ 48,000 $ 57,000
Accounts receivable 41,000 44,000
Inventory 55,000 50,000
Property, plant, and equipment 150,000 140,000
Less accumulated depreciation (50,000) (35,000)
Total assets $ 244,000 $ 256,000
Accounts payable $ 32,000 $ 57,000
Income taxes payable 25,000 28,000
Bonds payable 60,000 50,000
Common stock 70,000 60,000
Retained earnings 57,000 61,000
Total liabilities and stockholders’ equity $ 244,000 $ 256,000
During the year Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had originally cost $6,000 and had accumulated depreciation of $4,000. The company did not retire any bonds or repurchase any of its own common stock during the year.
Required:
What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows? (Input the amount as positive value.)
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And here are my notes:
cash -9000
AR +3000
inventory -5000
PPE -10,000
depreciation +15,000
AP -25,000
income tax pay -3000
bonds payable -10,000
stock payable +10,000
retained earnings -4000 (+ 2000?)
-38,000 (incorrect) [-32000]
dividend (applied to RE below)
loss +3000
acc dep +4000
-31,000 (incorrect) -25,000 (incorrect)
RE beg 61,000 - 6000 + credits = 57,000
credits = 2000
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I have 4 times to check my answer, and I've done it three times (every time you see incorrect in parentheses). Am I on the right track? What have I done wrong?
Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows:
Ending Balance Beginning Balance
Cash $ 48,000 $ 57,000
Accounts receivable 41,000 44,000
Inventory 55,000 50,000
Property, plant, and equipment 150,000 140,000
Less accumulated depreciation (50,000) (35,000)
Total assets $ 244,000 $ 256,000
Accounts payable $ 32,000 $ 57,000
Income taxes payable 25,000 28,000
Bonds payable 60,000 50,000
Common stock 70,000 60,000
Retained earnings 57,000 61,000
Total liabilities and stockholders’ equity $ 244,000 $ 256,000
During the year Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had originally cost $6,000 and had accumulated depreciation of $4,000. The company did not retire any bonds or repurchase any of its own common stock during the year.
Required:
What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows? (Input the amount as positive value.)
---
And here are my notes:
cash -9000
AR +3000
inventory -5000
PPE -10,000
depreciation +15,000
AP -25,000
income tax pay -3000
bonds payable -10,000
stock payable +10,000
retained earnings -4000 (+ 2000?)
-38,000 (incorrect) [-32000]
dividend (applied to RE below)
loss +3000
acc dep +4000
-31,000 (incorrect) -25,000 (incorrect)
RE beg 61,000 - 6000 + credits = 57,000
credits = 2000
---
I have 4 times to check my answer, and I've done it three times (every time you see incorrect in parentheses). Am I on the right track? What have I done wrong?