Reference no: EM132874667

Problem 1 - Jarem Company showed $189,000 in prepaid rent on December 31, 20X1. On December 31, 20X2, the balance in the prepaid rent account was $226,800. Rent expense for 20X2 was $472,500.

Required - What adjustment in prepaid expenses is needed if the indirect method is used to prepare Jarem's statement of cash flows?

Problem 2 - During 20X1, Craig Company had the following transactions:

a. Purchased $300,000 of 10-year bonds issued by Makenzie Inc.

b. Acquired land valued at $105,000 in exchange for machinery.

c. Sold equipment with original cost of $810,000 for $495,000; accumulated depreciation taken on the equipment to the point of sale was $270,000.

d. Purchased new machinery for $180,000.

e. Purchased common stock in Lemmons Company for $82,500.

Required - Prepare the net cash from investing activities section of the statement of cash flows.