Cavett Company's comparative balance sheet and income statement for last year appear below: The following additional information is available for the year:
* During the year,the company sold long-term investments with a cost of $38,000 when purchased for $33,000 in cash.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.
Required:
a.Using the direct method,determine the net cash provided by operating activities for the year.
b.Using the indirect method,determine the net cash provided by operating activities for the year.
c.Using the net cash provided by operating activities figure from either part a or b,prepare a statement of cash flows for the year.

Question

Cavett Company's comparative balance sheet and income statement for last year appear below:   The following additional information is available for the year:
* During the year,the company sold long-term investments with a cost of $38,000 when purchased for $33,000 in cash.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.
Required:
a.Using the direct method,determine the net cash provided by operating activities for the year.
b.Using the indirect method,determine the net cash provided by operating activities for the year.
c.Using the net cash provided by operating activities figure from either part a or b,prepare a statement of cash flows for the year.

Quizplus · Accepted Answer

The Answer of Cavett Company's comparative balance sheet and income statement for last year appear below:   The following additional information is available for the year:
* During the year,the company sold long-term investments with a cost of $38,000 when purchased for $33,000 in cash.
* All sales were on credit.
* The company paid a cash dividend of $25,000.
* The company did not dispose of any property,plant,and equipment,issue any bonds payable,or repurchase any of its own common stock during the year.
Required:
a.Using the direct method,determine the net cash provided by operating activities for the year.
b.Using the indirect method,determine the net cash provided by operating activities for the year.
c.Using the net cash provided by operating activities figure from either part a or b,prepare a statement of cash flows for the year.

Cavett Company's Comparative Balance Sheet and Income Statement for Last