Caleb Auto Parts Company Uses the Indirect Method to Prepare $\begin{array}{llr} \text {Caleb Company } &\\ \text {Comparative Balance Sheet } &\\ \text {December 31,2017 and 2016 } &\end{array}$

question 7

Essay

Caleb Auto Parts Company uses the indirect method to prepare its statement of cash flows.Refer to the following portion of the comparative balance sheet:

$\begin{array}{llr} \text {Caleb Company } &\\ \text {Comparative Balance Sheet } &\\ \text {December 31,2017 and 2016 } &\end{array}$
$\begin{array}{llll}& 2017 & 2016 & \text { Increase/(Decrease) } \\ \text { Cash } & \$ 42,000 & \$ 36,000 & \$ 6,000 \\\text { Accounts Receivable } & 62,000 & 70,000 & (8,000) \\\text { Merchandise Inventory } & 106,000 & 50,000 & 56,000 \\\text { PP\&E, net } & \underline{240,000} & \underline{180,000} & \underline{60,000} \\\text { Total Assets } & \$ 450,000 & \$ 336,000 & \$ 114,000\end{array}$
Additional information provided by the company includes the following:
Equipment costing $104,000 was purchased for cash.
Equipment with a net book value of $20,000 was sold for $28,000.
Depreciation expense of $24,000 was recorded during the year.
Prepare the investing activities section of the statement of cash flows.

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Definitions:

Parallel Lines

Lines in a plane that never meet, no matter how far they are extended.

Unified Object

A concept or entity perceived as a whole, where all components are considered together rather than individually.

Perceiving Distance

The cognitive process of determining the distance from oneself to an object or place, often involving visual and auditory cues.

Retinal Disparity

The slight difference in images processed by each eye, which contributes to depth perception and the ability to see the world in three dimensions.