The Following Data for Larson Co

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:
In addition to the balance sheet data, assume that:
• Equipment costing $125,000 was purchased for cash.
• Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.
• The stock was issued for cash.
• The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

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: $61,000; investing: ($110,000) ; financing: $71,000
D) operating: $144,000; investing: ($110,000) ; financing: ($12,000)

Correct Answer:

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