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 $ 113,600 $ 136,600 Accounts receivable 89,800 96,800 Inventory 120,600 110,000 Total current assets 324,000 343,400 Property, plant, and equipment 318,000 308,000 Less accumulated depreciation 106,000 77,000 Net property, plant, and equipment 212,000 231,000 Total assets $ 536,000 $ 574,400 Accounts payable $ 70,400 $ 125,000 Income taxes payable 54,600 74,400 Bonds payable 132,000 110,000 Common stock 154,000 132,000 Retained earnings 125,000 133,000 Total liabilities and stockholders’ equity $ 536,000 $ 574,400 During the year, Ravenna paid a $13,200 cash dividend and it sold a piece of equipment for $6,600 that had originally cost $15,600 and had accumulated depreciation of $10,400. The company did not retire any bonds or repurchase any of its own common stock during the year. How much depreciation would the company add to net income on its statement of cash flows? What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows? What is the company’s net cash provided by (used in) investing activities?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 10E

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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	$	113,600		$	136,600
Accounts receivable		89,800			96,800
Inventory		120,600			110,000
Total current assets		324,000			343,400
Property, plant, and equipment		318,000			308,000
Less accumulated depreciation		106,000			77,000
Net property, plant, and equipment		212,000			231,000
Total assets	$	536,000		$	574,400

Accounts payable	$	70,400		$	125,000
Income taxes payable		54,600			74,400
Bonds payable		132,000			110,000
Common stock		154,000			132,000
Retained earnings		125,000			133,000
Total liabilities and stockholders’ equity	$	536,000		$	574,400

During the year, Ravenna paid a $13,200 cash dividend and it sold a piece of equipment for $6,600 that had originally cost $15,600 and had accumulated depreciation of $10,400. The company did not retire any bonds or repurchase any of its own common stock during the year.

How much depreciation would the company add to net income on its statement of cash flows?

What is the amount of gross cash outflows reported in the investing section of the company’s statement of cash flows?

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

What is the amount of gross cash inflows reported in the financing section of the company’s statement of cash flows?

What is the amount of net cash provided by (used in) operating activities in the company’s statement of cash flows?

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