1 answer

Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section...

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:

Ending Balance Beginning Balance
Cash $ 72,600 $ 86,850
Accounts receivable 59,300 63,800
Inventory 79,600 72,500
Total current assets 211,500 223,150
Property, plant, and equipment 213,000 203,000
Less accumulated depreciation 71,000 50,750
Net property, plant, and equipment 142,000 152,250
Total assets $ 353,500 $ 375,400
Accounts payable $ 46,400 $ 82,500
Income taxes payable 36,100 45,400
Bonds payable 87,000 72,500
Common stock 101,500 87,000
Retained earnings 82,500 88,000
Total liabilities and stockholders’ equity $ 353,500 $ 375,400

During the year, Ravenna paid a $8,700 cash dividend and it sold a piece of equipment for $4,350 that had originally cost $9,600 and had accumulated depreciation of $6,400. The company did not retire any bonds or repurchase any of its own common stock during the year.

Foundational 14-13

13. What is the company’s net cash provided by (used in) investing activities?

15. What is the company’s net cash provided by (used in) financing activities?


Answers

13)
Cash flow from Investing Activities:
Purchase of equipment           (19,600)
Sale of equipment               4,350
Net Cash used in Investing activities           (15,250)
Net Cash provided by (used in) Investing activities?          (15,250)
Notes:
Purchase of Equipment
Beginning Balance           203,000
Less: Cost of Equipment sold             (9,600)
Ending Balance         (213,000)
Purchase of Equipment           (19,600)
14)
Cash flow from Financing Activities:
Issue of Bonds (87,000 - 72,500)             14,500
Issue of common stock (101,500 - 87,000)             14,500
Payment of cash dividend             (8,700)
Net Cash provided by Financing Activities             20,300
Net Cash provided by (used in) Financing activities?             20,300
.

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