Diaz Company Had the Following Comparative Balance Sheet Information at the End

question 43

Essay

Diaz Company had the following comparative balance sheet information at the end of Year 2 and Year 1:
$\begin{array}{c}\text {Diaz Company}\\\text { Comparative Balance Sheets}\\\begin{array}{lll}\\\text {Cash}\\\text {Accounts receivable}\\\text {Inventory}\\\text {Prepaid insurance}\\\text {Property, plant and equipment}\\\text {Accumulated depreciation}\\\text {Total}\\\text {Accounts payable}\\\text {Bonds payable}\\\text {Common stock}\\\text {Retained earnings}\\\text {Total}\end{array}\begin{array}{cc} \text { Year } 2 & \text { Year } 1 \\ \$ 30,000& \$ 28,000 \\ 48,000 & 50,000 \\ 158,000 & 156,000\\ 10,000& 8,000 \\ 70,000 & 60,000 \\ (14,000) & (10,000) \\\$ 302,000 & \$ 292,000 \\\$ 14,000 & \$ 18,000 \\ 90,000 & 120,000 \\140,000 & 120,000 \\58,000 & 34,000 \\\$302,000 &\$292,000 \\\end{array}\end{array}$
Diaz reported net income for Year 2 of $40,000.There were no sales or disposals of property,plant,and equipment during the year.Diaz uses the indirect method to prepare the statement of cash flows.
Calculate Diaz's cash flow from financing activities for Year 2.

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Definitions:

Computerized Accounting Systems

Digital systems that automate and manage financial transactions and records, enhancing accuracy and efficiency in financial reporting.

Journalizing Errors

Mistakes made during the process of recording transactions in the accounting journal.

Record Keeping

The process of maintaining accurate and systematic records of an organization's financial transactions and other significant events.

Timeliness

The quality of being done within a desirable time frame or deadline, often crucial for decision-making or reporting.