Avatar Company Uses the Indirect Method to Prepare Its Statement

Essay

Avatar Company uses the indirect method to prepare its statement of cash flows. Please refer to the following portion of the comparative balance sheet:
$$\begin{array} { | l | r | r | r | } \hline & { \mathbf { 2 0 1 4 } } & { \mathbf { 2 0 1 3 } } & { \text { Increase/decrease } } \\\hline \text { Cash } & \$ 21,000 & \$ 18,000 & \$ 3,000 \\\hline \text { Accounts receivable } & 31,000 & 35,000 & ( 4,000) \\\hline \text { Inventory } & 53,000 & 25,000 & 28,000 \\\hline \text { PP\&E, net } & 120,000 & 90,000 & 30,000 \\\hline \text { Total assets } & \$ 225,000 & \$ 168,000 & \$ 57,000 \\\hline\end{array}$$
Additional information provided:
• Equipment costing $52,000 was purchased for cash.
• Equipment with a net asset value of $10,000 was sold for $14,000.
• Depreciation expense of $12,000 was recorded during the year.
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Please prepare the investing activities section of the statement of cash flows using the following format:
$$\begin{array} { | l | l | l | } \hline \text { Investing activities: } & \quad \quad& \quad \quad \\\hline \text { Proceeds from sale of assets } & & \\\hline \text { Acquisition of assets } & & \\\hline \text { Net cash from investing activities } & & \\\hline\end{array}$$