Reference no: EM132473590
Question - Laux Company had the following Income Statement for 2018 and Balance sheets as of December 31, 2017 and 2018. Determine the net cash provided by or used for operating activities for 2018, the cash provided by or used for investing activities, and the cash provided by or used for financing activities.
Laux Company Income Statement For the year ended December 31, 2018 -
Sales $400,000
Cost of goods sold 194,000
Gross margin 206,000
Operating expenses 52,000
Income from operations 154,000
Gain on sale of equipment* 2,000
Income before taxes 156,000
Income tax expense 22,000
Net income $134,000
Laux Company Balance Sheet December 31, 2018 December 31, 2017 -
Assets
Cash 146,300 43,200
Accounts receivable 75,200 73,200
Merchandise inventory 55,000 59,000
Property and equipment 320,000 310,000
Less: Accumulated depreciation (100,000) (120,000)
496,500 365,400
Accounts payable 51,000 44,700
Wages payable 2,000 2,200
Note payable, long-term 73,000 77,000
Contributed capital 100,200 90,100
Retained earnings 270,300 151,400
496,500 365,400
*Laux sold equipment for $7,000. It had an original cost of $35,000 and accumulated depreciation of $30,000. There was a gain of $2,000 recognized on the sale. Laux sold stock for $13,000 and paid dividends of $15,100. Show dividends as a financing activity (rather than an operating activity).
Required -
1. What was depreciation expense?
2. What were acquisitions?
3. Evaluate the following answers based upon your answers (correct or incorrect) to the two previous questions.
a. Cash provided by (if positive) or cash used for (if negative) operating activities:
b. Cash provided by (if positive) or cash used for (if negative) investing activities:
c. Cash provided by (if positive) or cash used for (if negative) financing activities: