The following information were extracted from its financial statements of Avatar

ID: 2514988 • Letter: T

Question

The following information were extracted from its financial statements of Avatar Corporation:

Net Loss ($15,800)

Depreciation $25,300

Issuance of bonds payable $31,400

Payment of dividend $5,300

Purchase of equipment $1,200,000

Sale of equipment $320,000

Increase in inventory $12,000

Issuance of common stock $28,000

Loss on sale of equipment $42,000

Purchase of treasury stock $38,000

Increase in accounts payable $14,000

Increase in accounts receivable $9,000

Decrease in accrued liability $1,000

Required:

1. Prepare a statement showing the computation of the company’s net cash flow provided by operating activities from the above information

2. Prepare a statement showing the computation of the company’s net cash flow provided by financing activities from the above information.

Cash flow from operating activities

Net loss -15800

Add:

Depreciation 25300

Loss on sale of equipement 42000

Increase in creditors 14000

Dividend paid 5300 86600

Less:

Increase in inventory 12000

Increase in debtors 9000

Decrease in accrued liablity 1000 (22000)

Cash flow from operating activities 48800

Cash flow from financing activities

Issue bonds payable 31400

Issue common stock 28000

Dividend paid (5300)

Purchase treasury stock (38000)

cash flow from financing activities 16100

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