Chapter 10
The Statement of Cash Flow
486
Analysis
Does net income, after being adjusted by the non-cash items on the income statement,
represent the actual amount of cash received through operating activities by the company
during the year?
AP-7A (
2
)
The following information pertains to Tree Company for the fiscal year 2016.
Purchase of plant and equipment
$35,000
Purchase of long‐term investments
$19,000
Increase in accounts receivable
$7,100
Repayment of bonds payable
$12,000
Depreciation of plant andequipment
$10,000
Calculate the increase or decrease in cash from investing activities.
AP-8A (
2
)
The Marking Company’s cash account decreased by $20,000. Cash increase from operating
activities was $17,000. Net cash decrease from investing activities was $22,000. Calculate the
cash increase (or decrease) from financing activities.
