Avatar Company Uses the Indirect Method to Prepare Its Statement

question 24

Essay

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
$$\begin{array} { | l | r | r | r | } \hline & { \mathbf { 2 0 1 4 } } & { \mathbf { 2 0 1 3 } } & { \text { Increase/decrease } } \\\hline \text { Cash } & \$ 21,000 & \$ 18,000 & \$ 3,000 \\\hline \text { Accounts receivable } & 31,000 & 35,000 & ( 4,000) \\\hline \text { Inventory } & 53,000 & 25,000 & 28,000 \\\hline \text { PP\&E, net } & 120,000 & 90,000 & 30,000 \\\hline \text { Total assets } & \$ 225,000 & \$ 168,000 & \$ 57,000 \\\hline\end{array}$$
Additional information provided:
• Equipment costing $52,000 was purchased for cash.
• Equipment with a net asset value of $10,000 was sold for $14,000.
• Depreciation expense of $12,000 was recorded during the year.
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Please prepare the investing activities section of the statement of cash flows using the following format:
$$\begin{array} { | l | l | l | } \hline \text { Investing activities: } & \quad \quad& \quad \quad \\\hline \text { Proceeds from sale of assets } & & \\\hline \text { Acquisition of assets } & & \\\hline \text { Net cash from investing activities } & & \\\hline\end{array}$$

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Definitions:

Political Efficacy

The belief or confidence in one's ability to understand and influence political events.

Political Advocacy

The act of using strategic actions or lobbying to influence government policy or public opinion on specific political issues.

Political Ethics

The practice of making moral considerations about political action and political systems.

Administrative Agencies

Governmental bodies responsible for enforcing laws, creating regulations, and overseeing specific administrative areas.