Reference no: EM133009479

The following data for Larson Co. for the year ending December 31, Year 2, and the preceding year ended December 31, Year 1, are available:

                                                            Year 2                      Year 1
Cash                                                    $100,000               $78,000
Accounts receivable (net)                         78,000                  85,000
Inventories                                            101,500                  90,000
Equipment                                              410,000                370,000
Accumulated depreciation                         (150,000)             (158,000)
                                                               $539,500            $465,000

Accounts payable (merchandise creditors)         $58,500            $55,000
Cash dividends payable                                    5,000               4,000
Common stock, $10 par                                   200,000           170,000
Paid-in capital in excess of par-common stock       62,000             60,000
Retained earnings                                            214,000           176,000             
                                                                  $539,500           $465,000

In addition to the balance sheet data, assume that:

1. Equipment costing $125,000 was purchased for cash.
2. Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.
3. The stock was issued for cash.
4. The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

Problem 1: What are the net cash flows from operating, investing, and financing activities for Year 2?

a. operating: $112,000; investing: ($110,000); financing: $20,000

b. operating: $112,000; investing: $110,000; financing: $20,000

c. operating: $144,000; investing: ($110,000); financing: ($12,000)

d. operating: $61,000; investing: ($110,000); financing: $71,000