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Washington Company is preparing its statement of cash flows using the indirect method. Refer to the following portion of the comparative balance​ sheet: Washington Company Comparative Balance Sheet December​ 31, 2019 and 2018 2019 2018 ​Increase/(Decrease) Accounts Payable ​$9,000 ​$5,000 ​($4,000) Accrued Liabilities ​3,000 ​1,400 ​1,600 ​Long=term Notes Payable ​55,000 ​66,000 ​(11,000) Total Liabilities ​$67,000 ​$72,400 ​$(5,400) Additional information provided by the company includes the​ following: 1. During​ 2019, the company repaid​ $35,000 of​ long-term notes payable. 2. During​ 2019, the company borrowed​ $24,000 on a new​ long-term note payable. Based on the above information​ only, what amount of net cash flow would be shown in the financing section of the statement of cash​ flows?

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anthougo

Answer:

Washington Corporation

Financing Activities Section of the Statement of Cash Flows for the year ended December 31, 2019 will show a net cash flow of:

($11,000)

Explanation:

a) Data and Calculations:

Washington Company Comparative Balance Sheet December​ 31, 2019 and 2018:

                                                2019           2018 ​        Increase/(Decrease)

Accounts Payable ​                $9,000 ​       $5,000 ​       ($4,000)

Accrued Liabilities ​                  3,000 ​          1,400            ​1,600 ​

Long-term Notes Payable ​   55,000        ​66,000         ​(11,000)

Total Liabilities                    ​$67,000 ​     $72,400       ​$(5,400)

Repaid $35,000 of long-term notes payable

Borrowed $24,000 on new long-term notes payable

b) Financing Section:

Repayment of Long-term notes     ($35,000)

Borrowing from Long-term notes      24,000

Net cash flow from financing           ($11,000)

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