Question

Alvez reports net income of $322,500 for the year ended December 31. It also reports $102,800 depreciation expense and a $11,050 loss on the sale of equipment. Its comparative balance sheet reveals a $44,400 increase in accounts receivable, a $11,250 decrease in prepaid expenses, a $16,950 increase in accounts payable, a $13,900 decrease in wages payable, a $82,700 increase in equipment, and a $110,500 decrease in notes payable. Calculate the net increase in cash for the year.

Answer 1

Answer:

The net increase in the cash is $213,050

Explanation:

Cash-flow from Operating Activities

Net Income                                                           $322,500

Add: Depreciation                                                $102,800

Add: Loss on sale of equipment                         $11,050

Add: Decrease in prepaid Expenses                  $11,250

Add: Increase in Account Payable                      $16,950

Less: Increase in Account Receivable                $44,400

Less: Decrease in wages payable                       $13,900

Net Cash-flow from Operating activities A       $406,250

Cash-flow from Investing Activities

Less: Increase in equipment                                 $82,700

Net Cash-flow from Investing activities B

Cash-flow from Financing Activities

Less: Decrease in notes payable                          $110,500

Net Cash-flow from Financing activities C

Net Increase in Cash (A-B-C)                                 $213,050