STATEMENT OF CASH

FLOWS

INTERMEDIATE PROBLEM 3-12

INTERMEDIATE PROBLEM 3-12

W.C. Cycling had $55,000 in cash at year-end 2014 and $25,000 in cash
at year-end 2015. The firm invested in property, plant, and equipment
totaling $250,000. Cash flow from financing activities totaled +$170,000.

a. What was the cash flow from operating activities?

b. If accruals increased by $25,000, receivables and inventories increased
by $100,000, and depreciation and amortization totaled $10,000, what
was the firm’s net income?
 3-12.A
W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income xxx
Depreciation and Amortization xxx
Increase in Accounts Receivable and Inventory xxx
Increase in Accruals xxx
Net Cash Provided (Used) by Operating Activities ___

Investing Activities
Purchased Property, Plant, and Equipment $(250,000.00)
Net Cash Provided (Used) by Investing Activities $(250,000.00)

Financial Activities
Net Cash Provided (Used) by Financing Activities $170,000.00

Net Change in Cash xxx

Cash at the beginning of the year $55,000.00
Cash at the end of the year $25,000.00
 3-12.A
COMPUTATIONS:

Cash at the end of the year $25,000.00

Cash at the beginning of the year $55,000.00
Net Change in Cash $(30,000.00)

Net Change in Cash $(30,000.00)

Net Cash Provided (Used) by Financing Activities $(170,000.00)
Net Cash Provided (Used) by Investing Activities $250,000.00
Net Cash Provided (Used) by Operating Activities $50,000.00

a. What was the cash flow from operating activities?

Answer: $50,000.00
 3-12.A
W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income xxx
Depreciation and Amortization xxx
Increase in Accounts Receivable and Inventory xxx
Increase in Accruals xxx
Net Cash Provided (Used) by Operating Activities $50,000.00
Investing Activities
Purchased Property, Plant, and Equipment $(250,000.00)
Net Cash Provided (Used) by Investing Activities $(250,000.00)

Financial Activities
Net Cash Provided (Used) by Financing Activities $170,000.00

Net Change in Cash $(30,000.00)

Cash at the beginning of the year $55,000.00
Cash at the end of the year $25,000.00
 3-12.B

W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income xxx
Depreciation and Amortization xxx
Increase in Accounts Receivable and Inventory xxx
Increase in Accruals xxx
Net Cash Provided (Used) by Operating Activities $50,000.00
 3-12.B

W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income xxx
Depreciation and Amortization $10,000.00
Increase in Accounts Receivable and Inventory $(100,000.00)
Increase in Accruals $25,000.00
Net Cash Provided (Used) by Operating Activities $50,000.00
 3-12.B

Net Cash Provided (Used) by Operating Activities $50,000.00

Increase in Accruals $(25,000.00)
Increase in Accounts Receivable and Inventory $100,000.00
Depreciation and Amortization $(10,000.00)
Net Income $115,000.00

b. If accruals increased by $25,000, receivables and inventories increased by $100,000, and

depreciation and amortization totaled $10,000, what was the firm’s net income?
Answer: $115,000.00
 3-12.B

W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income $115,000.00
Depreciation and Amortization $10,000.00
Increase in Accounts Receivable and Inventory $(100,000.00)
Increase in Accruals $25,000.00
Net Cash Provided (Used) by Operating Activities $50,000.00
 3-12.A
W.C. Cycling
Statement of Cash Flows
As of 2015
Operating Activities
Net Income $115,000.00
Depreciation and Amortization $10,000.00
Increase in Accounts Receivable and Inventory $(100,000.00)
Increase in Accruals $25,000.00
Net Cash Provided (Used) by Operating Activities $50,000.00
Investing Activities
Purchased Property, Plant, and Equipment $(250,000.00)
Net Cash Provided (Used) by Investing Activities $(250,000.00)

Financial Activities
Net Cash Provided (Used) by Financing Activities $170,000.00

Net Change in Cash $(30,000.00)

Cash at the beginning of the year $55,000.00
Cash at the end of the year $25,000.00