NOTE TO THE INSTRUCTOR

question 126

Essay

NOTE TO THE INSTRUCTOR:
The problem requirement does not indicate whether the indirect or direct method must be used to determine the net cash provided by operating activities. You can, if you choose, specify that either (or even both) methods be used. The solution contains solutions for both methods.
Dauber Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $55,000 during the year. It did not sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock.
Required:
a. Construct in good form the operating activities section of the company's statement of cash flows for the year.
b. Construct in good form the investing activities section of the company's statement of cash flows for the year.
c. Construct in good form the financing activities section of the company's statement of cash flows for the year.

---

Definitions:

Psychological Magnitude

A concept in psychology that refers to the perceived size, amount, or intensity of a psychological attribute.

Weber Fraction

A principle stating that the just noticeable difference between two stimuli is proportional to the magnitude of the stimuli, a fundamental concept in psychophysics.

Stimulus

Anything in the environment that can trigger a physical or behavioral change in an organism.

Nativism

The theory that certain skills or abilities are "native" or hard-wired into the brain at birth.