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Keyser Beverage Company reported the following items in the most recent year.

Net income: $43,490

Dividends paid: 5,480

Increase in accounts receivable: 10,700

Increase in accounts payable: 8,970

Purchase of equipment (capital expenditure): 9,000

Depreciation expense: 7,970

Issue of notes payable: 21,500

Compute net cash provided by operating activities, the net change in cash during the year. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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Answer:

Net cash provided by operating activities = $49,730

Net change in cash during the year = $56,750

Explanation:

CASH FLOWS FROM OPERATING ACTIVITIES  $

Net Income     43,490

Adjustments to reconcile net income to      

net cash provided by operating activities:      

Depreciation on Fixed Assets    7,970  

(Increase) Decrease in Current Assets:      

Accounts Receivables    (10,700)

Increase (Decrease) in Current Liabilities:    

Accounts Payable     8,970

NET CASH PROVIDED BY OPERATING ACTIVITIES 49,730

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Equipment    (9,000)

NET CASH USED IN INVESTING ACTIVITIES  (9,000)

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of Cash Dividends    (5,480)

Issue of notes payable    21,500

NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES 16,020

NET INCREASE (DECREASE) IN CASH   56,750

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