Question

Delaware Coatings Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year​ 2019: Net cash provided by operating​ activities: $45,000 Net cash used for investing​ activities: ($29,000) Net cash provided by financing​ activities: $2,000 What is the net change in cash during the​ year?

Answer 1

The net change in cash for Delaware Coatings Company in the year 2019 is calculated by summing the cash flows from operating, investing, and financing activities, resulting in a net increase of $18,000.

Step-by-step explanation:

The student is asking about calculating the net change in cash during the year for the Delaware Coatings Company when using the indirect method for the statement of cash flows. To find the net change in cash, you add up the net cash provided by (or used in) operating activities, investing activities, and financing activities for the period.

In this case, you have the following:
Net cash provided by operating activities: $45,000
Net cash used for investing activities: ($29,000)
Net cash provided by financing activities: $2,000

By adding these figures together ($45,000 - $29,000 + $2,000), the net change in cash during the year 2019 for the company is $18,000.

Answer 2

The net change in cash during the period is $18,000

Step-by-step explanation:

The net change in cash during the period is computed as:

Net change in cash during the period = Net Cash provided by the operating activities - Net Cash used by the investing activities + Net Cash provided by the financing activities

where

Net Cash provided by the operating activities is $45,000

Net Cash used by the investing activities is ($29,000)

Net Cash provided by the financing activities is $2,000

Putting the values above:

= $45,000 - $29,000 + $2,000

= $16,000 + $2,000

= $18,000