Question: Karr Inc reported net income of 300 000 for 2014 Changes

Karr, Inc., reported net income of $300,000 for 2014. Changes occurred in several balance sheet accounts as follows:
Equipment ........ $25,000 increase
Inventories ....... $20,000 decrease
Accumulated depreciation . 40,000 increase
Accounts receivable ..... 15,000 increase
Note payable ....... 30,000 increase
Accounts payable ...... 5,000 decrease

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

Required:
1. In Karr’s 2014 statement of cash flows, calculate net cash provided by operating activities.
2. In Karr’s 2014 statement of cash flows, calculate net cash used in investing activities.




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  • CreatedSeptember 10, 2014
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