Depreciation Expense

Question

Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How should this information be reported on Addam’s statement of cash flows?

In financing activities as a source of funds.

In financing activities as a use of funds.

In investing activities as a use of funds.

In investing activities as a source of funds.

In operating activities as a source of funds.

Question

Northington, Inc. is preparing the company’s statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from operating activities using the indirect method:

Net income $182,000

Gain on the sale of equipment 12,300

Proceeds from the sale of equipment 92,300

Depreciation expense—equipment 50,000

Payment of bonds at maturity 100,000

Purchase of land 200,000

Issuance of common stock 300,000

Increase in merchandise inventory 35,400

Decrease in accounts receivable 28,800

Increase in accounts payable 23,700

Payment of cash dividends 32,000

$189,400.

$332,200.

$236,800.

$261,400.

$186,800.

Hint:  Net Income +Depreciation expense (equipment)-Gain on sale of equipment-INC in merchandise Inventory+DEC in accounts receivable+INC in accounts payable

= 182000+50000-12300-35400+28800+23700