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Calculate the cash flow related to financing activities | Finance homework help

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Downs view Company had a $163,000 cash balance at the beginning of 2011. The company reported net earnings of $285,000 for the year. Included in the company’s statement of earnings were depreciation expense of $66,000, interest expense of $32,000, and income tax expense of $102,000. The following also occurred in 2011:
1. Accounts receivable increased by $13,000.
2. Accounts payable increased by $5,500.
3. Inventory increased by $7,000.
4. Prepaid rent decreased by $1,200.
5. The plant and equipment account increased by $400,000. A piece of equipment that had a cost of $54,000 and a net book value of $18,000 was sold during the year for $22,000.
6. Interest payable decreased by $3,000.
7. Income taxes payable increased by $3,700.
8. The company issued $200,000 of bonds.
9. The company repurchased $40,000 of its shares.
10. Cash dividends of $50,000 were declared and paid.

Required:
To help Downs view Company’s management team better understand its cash flows, do the following:
a. Calculate the cash generated from operating activities.
b. Calculate the cash flow related to investing activities.
c. Calculate the cash flow related to financing activities.
d. Prepare a statement of cash flows for Downsview Company for 2011.

Solution:

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