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For the Year Ended December 31,20Y8
Cash flows from operating activities:
Net income 250000
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation 135000
Changes in current operating assets and liabilities:
Decrease in accounts receivable 20000
Increase in inventories -70000
Increase in Prepaid expenses -10000
Increase in accounts payable 25000
Net cash flow from operating activities 350000
Cash flows from investing activities:
Cash paid for equipment -420000
Net cash flow used for investing activities -420000
Cash flows from financing activities:
Cash received from the sale of common stock of 600000
Cash paid for dividends -45000
Cash paid to retire mortgage note payable -500000
Net cash flow used for financing activities 55000
Net decrease in cash -15000
Cash balance, January 1,20Y8 110000
Cash balance, December 31,20Y8 95000
In accountancy, depreciation is a term that refers to two aspects of the identical concept: first, the actual lower honest cost of an asset, including the lower price of the factory device every 12 months as it is used and put on, and 2nd, the allocation in accounting statements of the original price of the property to intervals.
Strategies of computing depreciation, and the durations over which properties are depreciated, can also range among asset sorts within the same business and may vary for tax functions. these may be certain through regulation or accounting standards, which may additionally range by USA. There are several fashionable methods of computing depreciation price, which include constant percentage, direct line, and declining balance strategies. The depreciation fee typically starts offevolved while the asset is placed in the provider.
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