Question

Mayweather reports net income of $317,500 for the year ended December 31. It also reports $100,200 depreciation expense and a $10,750 loss on the sale of equipment. Its comparative balance sheet reveals a $43,200 increase in accounts receivable, a $10,950 decrease in prepaid expenses, a $16,450 increase in accounts payable, a $13,500 decrease in wages payable, a $80,500 increase in equipment, and a $107,500 decrease in notes payable. Calculate the net increase in cash for the year.

Answer 1

$211,150

Step-by-step explanation:

Operating Activities

Net Income $317,500

Adjustment for :

Depreciation $100,200

Loss on Sale of equipment $10,750

Changes in working capital items :

Increase in accounts receivable ($43,200)

Decrease in prepaid expenses $10,950

Increase in accounts payable $16,450

Decrease in wages payable ($13,500)

Investing Activities

Increase in equipment ($80,500)

Financing Activities

Decrease in notes payable ($107,500)

Movement during the year $211,150

therefore,

the net increase in cash for the year is $211,150