Manning Tint, Inc. uses the indirect method to prepare its statement of cash flo
ID: 2528631 • Letter: M
Question
Manning Tint, Inc. uses the indirect method to prepare its statement of cash flows. Refer to the following portion of the comparative balance sheet:
Manning Tint, Inc.
Comparative Balance Sheet
December 31, 2017 and 2016
2016
2015
Increase/(Decrease)
Cash
$28,000
$25,000
$3,000
Accounts Receivable
34,000
36,000
(2,000)
Merchandise Inventory
53,000
26,000
27,000
Plant and Equipment
126,000
94,000
32,000
Accumulated
DepreciationminusPlant
and Equipment
(45,000)
(44,000)
(1,000)
Total Assets
$196,000
$137,000
$59,000
Additional information provided by the company includes the following:
1. Equipment was purchased for $68,000.
2. Equipment with a cost of $36,000 and accumulated depreciation of $7,400 was sold for $50,000.
What was the amount of net cash provided by (used for) investing activities?
A.
$18,000
B.
$177,000
C.
$(177,000)
D.
$(18,000
Explanation / Answer
Answer is D. ($18,000)
Computations:
Determination of the amount of net cash provided by (used for) investing activities:
Purchase of equipment ($68,000) Cash outflow
Sale of equipment $50,000 cash inflow
Net cash used by investing activities = ($18,000)
The plant and equipment book value -
Beginning balance $94,000
Less: Sale of equipment ($36,000)
Add: Purchase of equipment $68,000
Ending balance $126,000
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