Part 3. The Indirect Method Cara Cara Packing Inc. reported the following inform

Question

Part 3. The Indirect Method Cara Cara Packing Inc. reported the following information for 2012: Net income $ 1,500,000 Increase in net current assets 60,000 Increase in net current liabilities 65,000 Gain on sale of investments 9,000 Depreciation expense 130,000 Loss on bond redemption 10,000 Prepare the operating activities section of Cara Cara’s statement of cash flows using the direct method. Enter your answers in the shaded boxes. A couple of boxes have been completed for you. Cash flows from operating activities Net income Adjustments to reconcile net income to net cash Depreciation expense Net cash provided by operating activities

Part 4. Investing Activities Style Squared provided the following information on transactions that occurred during the year: a. An old plant was purchased for $300,000 was sold for $93,000. b. Style squared purchased $45,000 in stock from Avett Systems. c. A new production plant was purchased for $550,000 cash. d. Stock in Iver Inc. was sold for $23,000. e. New equipment was purchased for $13,000. Use this information to compute cash flows from investing activities. Enter your answers in the shaded boxes below. A couple of boxes have been completed for you. Cash flows from investing activities Purchase of production plant Net cash used in investing activities

Explanation / Answer

Part 3. Reconciliation of net income to net cash provided by operating activities:

Part 4.Cash flows from Investing activities

$ $ Net income    1,500,000.00 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation        130,000.00 Increase in Net Current assets        (60,000.00) Increase in Net current Liabilities          65,000.00 Gain on sale of Investments          (9,000.00) Total adjustments        126,000.00 Net cash provided by operating activities    1,626,000.00

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