Question: Accrued expenses 15,100 18,100 Notes payable 6 bank, long-term 300 23,100 Bonds payable 30,000 0 6 Common stock, $10 par 188,100 157,800 Retained earnings 8,860 5,500 $307,560 $256,500 Land was acquired for $30,300 in exchange for common stock, par $30,300, during the year; all equipment purchased was for cash. Equipment costing $12,900 was sold for $3,000; the book value of the equipment was $6,100. Cash dividends of $10,000 were declared and paid during the year. Compute net cash provided (used) by: (Show amounts that decrease cash flow with either a - sign e.g. -12,000 or in parenthesis e.g. (12,000.)) a. Net Cash provided by operating activities using the indirect method. $ [blank] b. Net Cash used by investing activities. $ [blank] c. Net Cash used by financing activities. $ [blank]

1. **State the problem:** Calculate net cash flows from operating, investing, and financing activities using the indirect method based on the given data. 2. **Operating Activities (Indirect Method):** - Start with net income: Change in retained earnings = $8,860 - $5,500 = $3,360 - Subtract dividends paid: $10,000 - Calculate net income: $3,360 + $10,000 = $13,360 - Adjust for non-cash expenses and changes in working capital: - Increase in accrued expenses (liability increase adds cash): $18,100 - $15,100 = $3,000 3. **Investing Activities:** - Equipment sold: Cash received = $3,000 - Book value of equipment sold = $6,100 - Loss on sale = $6,100 - $3,000 = $3,100 (non-cash loss, add back in operating activities) - Equipment purchased for cash: Cost unknown, but since land was acquired by stock, all equipment purchases were cash outflows. - Equipment cost sold was $12,900, so net equipment purchased = $12,900 - $6,100 = $6,800 (cash outflow) - Net cash used by investing = Cash received from sale - cash paid for equipment = $3,000 - $6,800 = -$3,800 4. **Financing Activities:** - Notes payable increased from $0 to $23,100 (cash inflow) - Bonds payable decreased from $30,000 to $0 (cash outflow) - Common stock increased from $157,800 to $188,100, but $30,300 was issued for land (non-cash), so cash increase = $188,100 - $157,800 - $30,300 = $0 - Dividends paid = ($10,000) cash outflow - Net cash from financing = $23,100 - $30,000 - $10,000 = -$16,900 5. **Calculate net cash provided by operating activities:** - Start with net income: $13,360 - Add back loss on sale of equipment: $3,100 - Add increase in accrued expenses: $3,000 - Net cash from operating = $13,360 + $3,100 + $3,000 = $19,460 **Final answers:** - a. Net Cash provided by operating activities = $19,460 - b. Net Cash used by investing activities = ($3,800) - c. Net Cash used by financing activities = ($16,900)