Operating Activities: Indirect Method Video Lessons

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Problem: The N Company's cash balance at January 1, 2013, was $150,000. The following information was reported on the company statement of cash flows for 2013: Net income                                                                         $360,000 Depreciation and amortization                                              110,000 Increase in accounts receivable                                             58,000 Increase in inventory                                                            120,000 Decrease in accounts payable                                               40,000 Dividends paid to shareholders                                              25,000 Proceeds from sale of common stock                                  500,000 Repayment of bonds payable                                              200,000 Proceeds from sale of equipment,book value = $84,000      50,000 Purchase of land and building                                             300,000 The N Company's balance sheet would report the balance of Cash on December 31, 2013 a) $311,000. b) $410,000 c) $426,000 d) $461,000.

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Problem Details

The N Company's cash balance at January 1, 2013, was $150,000. The following information was reported on the company statement of cash flows for 2013:

Net income                                                                         $360,000
Depreciation and amortization                                              110,000
Increase in accounts receivable                                             58,000
Increase in inventory                                                            120,000
Decrease in accounts payable                                               40,000
Dividends paid to shareholders                                              25,000
Proceeds from sale of common stock                                  500,000
Repayment of bonds payable                                              200,000
Proceeds from sale of equipment,book value = $84,000      50,000
Purchase of land and building                                             300,000

The N Company's balance sheet would report the balance of Cash on December 31, 2013

a) $311,000.

b) $410,000

c) $426,000

d) $461,000.

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