Ravenna Company is a merchandiser that uses the indirect method to prepare the o
ID: 2475541 • Letter: R
Question
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:
What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows?
What is the company’s net cash provided by (used in) investing activities
What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?
What is the company’s net cash provided by (used in) financing activities?
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:
Explanation / Answer
1 Investing Activites Increase in Account Balance Decrease in Account Balance Net Cash Flows Non Current Assets $ $ $ Property , Plant & Equipment -11000 0 -11000 0 -11000 2 Liabilities and stock holders' equity( Financing Activities) Bonds Payable 14000 0 Common Stock 14000 0 Retained Earnings 0 -5300 28000 -5300 22700 Notes 1.00 The data also state that Ravenna company did not retire any bonds payable during the year; therefore, the $14000 increase in Bonds Payable must be due to issuing bonds payable 2.00 The Common Stock account had activity during the period, so it does impact the Statement of cash flows. 3.00 This leaves two accounts that require further analysis Property, Plant, and Equipment purchased Retained Earings adjusted somehow with other respect in cash out flows
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