+ Cash from revenues of $1,450 − Cash to pay expenses of $640 − Cash used to pay dividends of $240 = $4,375
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-07 Prepare an income statement, a
statement of changes in stockholders equity, and a balance sheet.
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)
1) Acquired $950 cash from the issue of common stock.
2) Borrowed $420 from a bank.
3) Earned $650 of revenues cash.
4) Paid expenses of $250.
5) Paid a $50 dividend.
During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)
1) Issued an additional $325 of common stock.
2) Repaid $220 of its debt to the bank.
3) Earned revenues of $750 cash.
4) Paid expenses of $360.
5) Paid dividends of $100.
What is the amount of total assets that will be reported on Packard's balance sheet at the end of Year 2?
$2,115
$440
$2,215
$395
Year 1: Ending total assets = Beginning total assets of $0 + Cash from issuance of common stock of $950 + Cash from borrowing of $420 + Cash from revenues
of $650 − Cash to pay expenses of $250 − Cash used to pay dividends of $50 = $1,720
Year 2: Ending total assets = Beginning total assets of $1,720 (from above) + Cash from issuance of common stock of $325 − Cash used to repay debt of $220
+ Cash from revenues of $750 − Cash to pay expenses of $360 − Cash used to pay dividends of $100 = $2,115
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-07 Prepare an income statement, a
statement of changes in stockholders equity, and a balance sheet.
91.
Award: 1.00 point
92.
Award: 1.00 point
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)
1) Acquired $1,350 cash from the issue of common stock.
2) Borrowed $820 from a bank.
3) Earned $1,000 of revenues cash.
4) Paid expenses of $330.
5) Paid a $130 dividend.
During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)
1) Issued an additional $725 of common stock.
2) Repaid $500 of its debt to the bank.
3) Earned revenues of $1,150 cash.
4) Incurred expenses of $520.
5) Paid dividends of $180.
What is the net cash inflow from operating activities on Packard's statement of cash flows for Year 2?
$630
$1,395
$540
$1,000
Net cash inflow from operating activities = Inflow from revenue of $1,150 − Outflow for expenses of $520 = Net inflow of $630
References
Multiple Choice Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-08
Prepare a statement of cash
flows.
Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)
1) Acquired $950 cash from the issue of common stock.
2) Borrowed $420 from a bank.
3) Earned $650 of revenues cash.
4) Paid expenses of $250.
5) Paid a $50 dividend.
During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)
1) Issued an additional $325 of common stock.
2) Repaid $220 of its debt to the bank.
3) Earned revenues of $750 cash.
4) Incurred expenses of $360.
5) Paid dividends of $100.
What is the net cash inflow from operating activities on Packard's statement of cash flows for Year 2?
$390
$650
$350
$820
Net cash inflow from operating activities = Inflow from revenue of $750 − Outflow for expenses of $360 = Net inflow of $390
References
Multiple Choice Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-08
Prepare a statement of cash
flows.
93.
Award: 1.00 point
94.
Award: 1.00 point
Which of the following items would appear in the cash flow from financing activities section of a statement of cash flows?
Paid cash for dividends
Received cash for common stock
Sold land for cash
Paying cash for dividends as well as receiving cash from common stock
Paying cash for dividends and receiving cash for common stock are financing activities. Selling land for cash is an investing activity.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-08 Prepare a statement of cash flows.