Question

Rocky Road Bicycles, Inc. Rocky Road Bicycles, Inc. Comparative Balance Sheets Income Statements December 31, 2018 and 2017 For the Years Ended December 31, 2018 and 2017 2018 2017 2018 2017 Common Size Common Size Common Size Common Size Assets Cash $105,000 $94,000 Net revenue $952,000 $842,000 Account receivable 217,000 450,000 Cost of sales 447,000 395,000 Inventory 800,000 700,000 Gross profit 505,000 447,000 Prepaid rent 50,000 50,000 Selling, general and administrative expenses 327,000 305,000 Plant assets 1,854,000 1,753,000 Operating profit 178,000 142,000 Less accumulated depreciation (565,000) (502,000) Interest expense (15,000) (25,000) Total assets $2,461,000 $2,545,000 Interest income and other 5,000 4,000 Income before income taxes 168,000 121,000 Liabilities Provision for income taxes 32,000 25,000 Accounts payable $306,000 $500,000 Net Income $136,000 $96,000 Wages payable 27,000 27,000 Income tax payable 24,000 50,000 Equity Common stock 1,242,000 1,242,000 Retained earnings 862,000 726,000 Total liabilities and equity $2,461,000 $2,545,000

Prepare the statement of cash flows from investing activities.

Answer 1

Rocky Road Bicycles, Inc.

Statement of Cash Flow from Investing Activities:

Plants Assets ($1,854,000 - 1,753,000) = $101,000

There was a net cash inflow of $101,000 from the sale of plant assets since it reduced from $$1,854,000 to $1,753,000 from 2017 to 2018.

Step-by-step explanation:

A Statement of Cash Flow from investing activities is a section of the cash flow statement showing the cash generated from or spent on investment activities. Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets.