1. Panjim\'s 2005 cash flow from operations is: A net outflow of $90,000 A net i
ID: 2489197 • Letter: 1
Question
1. Panjim's 2005 cash flow from operations is:
A net outflow of $90,000
A net inflow of $90,000
A net inflow of $85,000
A net outflow of $85,000
2. Panjim's 2005 cash flow from investing activities is:
A net outflow of $7,000
A net inflow of $3,000
A net inflow of $7,000
A net outflow of $3,000
3. Panjim's 2005 cash flow from financing activities is:
A net outflow of $91,000
A net inflow of $86,000
A net outflow of $86,000
A net inflow of $91,000
4. Panjim recorded an interest expense of $6,000 for 2005. Which one of the following line items would be included in the operating section of the Panjim's 2005 indirect method statement of cash flows?
Add increase in interest payable...$1,000
Subtract increase in interest payable...($1,000)
Add increase in interest payable...$6,000
Subtract decrease in interest payable...($5,000)
Explanation / Answer
The first three questions are incomplete without the data for the panjim's corporation.
4.
Answer is "Add increase in interest payable...$1,000"
In the indirect methos statement of cash flows, the net income is adjusted with the changes in working capital to arrive at the net cash flow from oprating activties. $6,000 recorded as interest expense increases the accounts payable which is added to the opearing activities section.
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