The changes in each balance sheet account for Carver Corporation during the year just completed are as follows: IncreaseDecreaseCash and cash equivalents$3,000 Accounts receivable$5,000 Inventory $6,000 Prepaid expenses$3,000 Long-term investments $17,000 Property, plant and equipment$11,000 Accumulated depreciation$9,000 Accounts payable $8,000 Accrued liabilities$5,000 Bonds Payable $12,000 Common Stock$3,000 Retained Earnings$2,000 Carver Corporation's income statement for the year just ended shows the following:Income StatementSales$350,000Cost of goods sold 190,000Gross margin 160,000Selling and administrative expense 158,000Net income$2,000The company did not dispose of any property, plant, and
equipment, buy any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. Carver Corporation uses the direct method to construct its statement of cash flows.Required:a. Determine the sales adjusted to the cash basis.b. Determine the cost of goods sold adjusted to the cash basis.c. Determine the selling and administrative expenses adjusted to a cash basis.d. Determine the net cash provided by (used in) operating activities.e. Determine the net cash provided by (used in) investing activities.f. Determine the net cash provided by (used in) financing activities.
What will be an ideal response?
Requirements a through d:
| Sales (as reported) | $350,000 | ? |
| Adjustments to a cash basis: | ? | ? |
| Increase in accounts receivable | -5,000 | $345,000 |
| ? | ? | ? |
| Cost of goods sold (as reported) | 190,000 | ? |
| Adjustments to a cash basis: | ? | ? |
| Decrease in inventory | -6,000 | ? |
| Decrease in accounts payable | +8,000 | 192,000 |
| ? | ? | ? |
| Selling and administrative expense (as reported) | 158,000 | ? |
| Adjustments to a cash basis: | ? | ? |
| Increase in prepaid expenses | +3,000 | ? |
| Increase in accrued liability | -5,000 | ? |
| Depreciation | -9,000 | 147,000 |
| ? | ? | ? |
| Net cash provided by (used in) operating activities | ? | $ 6,000 |
e.
| Investing activities: | |||
| Sale of long-term investment | $ | 17,000 | |
| Purchase of property, plant, and equipment | ( 11,000 | ) | |
| Net cash provided by (used in) investing activities | $ | 6,000 |
| Financing activities: | |||
| Sale of common stock | $ | 3,000 | |
| Repaying principle on bonds payable | (12,000) | ? | |
| Net cash provided by (used in) financing activities | $ | (9,000) | ? |
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