Final answer:
Net cash provided by operating activities for Keyser Beverage Company is $77,000, net cash used in investing activities is -$8,000, and net cash provided by financing activities is $15,000.
Step-by-step explanation:
Computing Cash Flows from Operating, Investing, and Financing Activities
To compute the net cash from operating, investing, and financing activities for Keyser Beverage Company, we begin by analyzing the provided financial figures. Starting with operating activities, net income is adjusted for changes in working capital and non-cash expenses. Hence, we calculate net cash from operating activities as:
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- Net Income: $40,000
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- Add back Depreciation Expense (non-cash): $40,000
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- Adjust for Increase in Accounts Receivable (outflow): -$10,000
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- Adjust for Increase in Accounts Payable (inflow): $7,000
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- Net cash provided by operating activities = $40,000 + $40,000 - $10,000 + $7,000 = $77,000
Moving to investing activities, which typically include purchases and sales of long-term assets, the net cash used in investing activities is simply the Purchase of Equipment:
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- Purchase of Equipment (outflow): -$8,000
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- Net cash used in investing activities = -$8,000
Finally, for financing activities, which relate to debt and equity transactions with the company's owners and creditors, we account for the Dividends Paid and Issue of Notes Payable:
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- Dividends Paid (outflow): -$5,000
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- Issue of Notes Payable (inflow): $20,000
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- Net cash provided by (used in) financing activities = $20,000 - $5,000 = $15,000