Question

Karr Inc. reported net income of $300,000 for 2014. Changes occurred in several balance sheet accounts as follows:
Equipment ........ $25,000 increase
Accumulated depreciation .. 40,000 increase
Note payable ........ 30,000 increase

Additional Information:
1. During 2014, Karr sold equipment that cost $25,000 and had accumulated depreciation of $12,000, for a gain of $5,000.
2. In December 2014, Karr purchased equipment costing $50,000 with $20,000 cash and a 12% note payable of $30,000.
3. Depreciation expense for the year was $52,000.

Required:
1. In Karr’s 2014 statement of cash flows, what should be the net cash from operating activities?
2. In Karr’s 2014 statement of cash flows, what should be the net cash used in investing activities?



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  • CreatedSeptember 10, 2014
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