What Are the Operating, Investing and Financing cash flows respectively, for Yea

Question

What Are the Operating, Investing and Financing cash flows respectively, for Year 2? Show your work.

es in account balances A company reports the tollowing chang Year 2 1,000 4,000 Year 1 3,000 1,000 Year 2 Year 1 Cash Accounts receivable Accounts payable 4,000 2,000 PP&E at cost Accumulated depreciation Net PP&E 12,000 2,000 10,000 10,000 1,000 9,000 Long-term debt Common stock Retained earnings 7,000 6, 1,000 1,000 3,000 6,000 4,000 Total Assets 15,000 13,000 5,000 13,000 What are operating, investing, and financing cash flows, respectively, for Year 2?

Explanation / Answer

Cash flows from operating activities Net Income   $ (1,000) 3000-4000 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense $   1,000 2000-1000 Increase in accounts receivable $ (3,000) 1000-4000 Increase in accounts payable $   2,000 4000-2000 $            - Net cash used by operating activities $ (1,000) Cash flows from investing activities Cash paid for purchase of PP&E $ (2,000) 10000-12000 Net cash used by investing activities $ (2,000) Cash flows from financing activities Cash received from long term debt $   1,000 7000-6000 Net cash provided by financing activities $   1,000 Net Increase in cash and cash equivalents $ (2,000) Cash and cash equivalents at beginning of period $   3,000 Cash and cash equivalents at end of period $   1,000

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