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

question 55

Essay

Diaz Company had the following comparative balance sheet information at the end of Year 2 and Year 1:
Diaz reported net income for Year 2 of $40,000. No property, plant, & equipment was disposed of during the year. Diaz uses the indirect method to prepare the statement of cash flows.Calculate Diaz's cash flow from investing activities for Year 2. Diaz Company
Comparative Balance Sheets
$$\begin{array}{l}\begin{array} {| l | l | l | } \hline &2013&2014\\\hline \text {Cash }&\$ 30,000&\$28,000 \\\hline \text {Accounts receivable}&48,000&50,000 \\\hline \text {Inventory }& 158,000&156,000\\\hline \text {Prepaid insurance }&10,000&8,000\\\hline \text {Property, plant and equipment }&70,000&60,000\\\hline \text {Accumulated depreciation }&(14,000)&(10,000)\\\hline \text {Total }&\$302,000&\$292,000\\\hline \text { }&\\\hline \text { Accounts payable } &\$ 14,000& \$ 18,000\\\hline \text { Bonds payable } &90,000&120,000\\\hline \text {Common stock } & 140,000&120,000\\\hline \text { Retained earnings }&58,000&34,000 \\\hline \text { Total } &\$ 302,000&\$ 292,000\\\hline\end{array}\end{array}$$

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Definitions:

Market Positioning

The process of establishing and maintaining a desirable perception of a company's product or service in the market relative to competitors, focusing on unique value propositions.

Situational Analysis

The process of identifying internal and external factors affecting a business’s performance, used to inform strategy development.

Competing Products

Goods or services that are offered in the same market by different companies and serve as alternatives to each other.

Organic Foods Market

A sector of the food industry that deals with products produced via farming practices which aim to promote ecological balance and conserve biodiversity, avoiding most synthetic pesticides and fertilizers.