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

question 148

Essay

Diaz Company had the following comparative balance sheet information at the end of Year 2 and Year 1:
$\begin{array}{c} \text {Diaz Company}\\ \text { Comparative Balance Sheets}\\\begin{array}{lll}&\text { Year } 2 \\ \text { Cash } & \$ 30,000 \\ \text { Accounts receivable } & 48,000 \\ \text { Inventory } & 158,000 \\ \text {Prepaid insurance } & 10,000 \\\text { Property, plant and equipment } & 70,000 \\ \text { Accumulated depreciation } & (14,000) \\ \text { Total } & \$ 302,000 \\ \text { Acounts payable } & \$ 14,000 \\ \text { Bonds payable } & 90,000 \\ \text { Common stock } & 140,000 \\\text { Retained earnings } & 58,000 \\ & \$ 302,000 \\\end{array}\begin{array}{r}\text { Year } 1 \\ \$ 28,000 \\50,000 \\156,000 \\8,00 0 \\60,000 \\(10,000) \\ 292,000 \\ \$ 18,000\\120,000 \\120,000 \\34,000 \\ 292,000\end{array}\end{array}$
Diaz reported net income for Year 2 of $40,000.No property,plant,and equipment were disposed of during the year.Diaz uses the indirect method to prepare the statement of cash flows.
Using the indirect method,calculate Diaz's cash flow from operating activities for Year 2.

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Definitions:

Strange Situation

A standardized procedure devised by Mary Ainsworth in the 1970s to observe attachment relationships between a caregiver and children.

Attachment

The emotional bond between an infant and the primary caregiver.

Mary Ainsworth

A developmental psychologist known for her work in early emotional attachment with "The Strange Situation" assessment.

Industry Versus Inferiority

A stage in Erik Erikson's theory of psychosocial development where children develop a sense of competency and skills, or feel inadequate and inferior.