Chapter 10
The Statement of Cash Flow
487
AP-9A (
2
)
The Grading Company’s cash account decreased by $14,000. Cash increase from operating
activities was $21,000. Net cash decrease from investing activities was $22,000. Based on this
information, calculate the cash increase (or decrease) from financing activities.
AP-10A (
3
)
Allen Woods has just started working as an accountant for Stickla Supplies. Unfortunately,
the company had no proper accounting system in place and Allen had to start everything
from scratch. He has been provided with some items from the company’s balance sheet and
income statement for the end of 2016.
Going through the company’s purchase receipts and some other financial documents, Allen
realized that Stickla purchased $2,500 of equipment in 2016 and the balance of property,
plant and equipment and accumulated depreciation at the end of 2015 was $11,000 and
$2,900 respectively. Accounts payable balance was not affected by any investment activities
during 2016.
Accounts
2016
Property, Plant and Equipment
$10,000
Accumulated Depreciation
$3,600
Accounts Payable
$4,000
Current Portion of Bank Loan
$15,000
Retained Earnings
$5,400
Depreciation Expense
$1,200
Loss on Sale of Equipment
$300
