Question

Mattix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.

Answer 1

net income $116

+ depreciation (359 - 347 + 1) $13

change in current assets:

+ decrease in accounts receivables $1

+ decrease in inventory $1

change in current liabilities:

+ increase in accounts payables $4

- decrease in accrued liabilities ($4)

+ increase in taxes payable $1

net cash provided by operating activities $132

Step-by-step explanation:

ending beginning

Assets

Cash and cash equivalents $ 23 $ 22

Accounts receivable 39 40

Inventory 43 44

Property, plant, and equipment 587 500

Less accumulated depreciation 359 347

Total assets $ 333 $ 259

Liabilities and stockholders' equity:

Accounts payable $ 30 $ 26

Accrued liabilities 15 18

Income taxes payable 39 40

Bonds payable 109 120

Common stock 51 50

Retained earnings 89 5

Total liabilities and stockholders' equity $ 333 $ 259

Income Statement Sales $ 972

Cost of goods sold 620

Gross margin 352

Selling and administrative expense 200

Net operating income 152

Gain on sale of equipment 14

Income before taxes 166

Income taxes 50

Net income $ 116