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Mayweather reports net income of $317,500 for the year ended December 31. It also reports $100,200 depreciation expense and a $10,750 loss on the sale of equipment. Its comparative balance sheet reveals a $43,200 increase in accounts receivable, a $10,950 decrease in prepaid expenses, a $16,450 increase in accounts payable, a $13,500 decrease in wages payable, a $80,500 increase in equipment, and a $107,500 decrease in notes payable. Calculate the net increase in cash for the year.

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Zviko

Answer:

$211,150

Explanation:

Operating Activities

Net Income                                                            $317,500

Adjustment for :

Depreciation                                                         $100,200

Loss on Sale of equipment                                    $10,750

Changes in working capital items :

Increase in accounts receivable                         ($43,200)

Decrease in prepaid expenses                             $10,950

Increase in accounts payable                                $16,450

Decrease in wages payable                                ($13,500)

Investing Activities

Increase in equipment                                        ($80,500)

Financing Activities

Decrease in notes payable                                ($107,500)

Movement during the year                                   $211,150

therefore,

the net increase in cash for the year is $211,150

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