Ch05QuizSol - 4 Sales for the year totaled $125,000 The...

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Quiz #5 - Chapter 5 - Solution 1. In the long run, a firm must depend on its _______ activities to meet most of its cash flow needs. a. operating c. financing b. investing d. nonrecurring 2. A statement of cash flows has been prepared. The sum of the three major components (operating activities, investing activities, financing activities) will add up to an amount equal to a. the ending cash balance reported on the balance sheet b. net income for the period on the cash basis c. the ending amount of working capital d. the net change in the cash account during the year 3. Big Deals, Inc. had the following cash flows during March: Paid for equipment $ 6,000 Received a loan $7,000 Paid for inventory 2,000 Paid wages to employees 4,000 Received from cash sales 10,000 Received from sale of building 10,000 What was the cash flow from investing activities? 4,000 inflow (10,000 - 6,000) Be sure to include whether it is a cash inflow or outflow.
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Unformatted text preview: 4. Sales for the year totaled $125,000. The following information is also available. Accounts receivable (Beginning of year) $30,000 Accounts receivable (End of year) 25,000 Cost of goods sold 80,000 What amount of cash was collected from customers during the year? $130,000 $125,000 + (30,000 - 25,000) = $130,000 5. Given the following information for a recent fiscal year: 1. Accounts receivable increased by $24,000 5. Depreciation expense was $8,000 2. Common stock increased by $10,000 6. Prepaid expense increased by $20,000 3. Wages payable decreased by $16,000 7. Bonds payable decreased by $4,000 4. Cash flows from operating activities <$4,000> 8. Land increased by $50,000 Determine net income for the year: $48,000 Net income + 8,000 (depreciation) - 24,000 (A/R inc) - 16,000 (wages pay dec)- 20,000 (prepaid exp inc) = <4,000> => Net income = 48,000...
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