Question 2 The following information is necessary to answer questions 2, 3, and
ID: 2583672 • Letter: Q
Question
Question 2
The following information is necessary to answer questions 2, 3, and 4:
Increase in prepaid insurance 1000; Goodwill 2000; Equipment Depreciation expense 15000; Increase in accounts payable 3000; Net income 35000;Issuance of common stock 12000; Increase in inventory 5000; Payment of dividends 9000; Increase in bonds payable 7000;Decrease in accounts receivable 4000; increase in mortgage payable 26000;
Addditional information: Purchased equipment for $ 20,000, financing $ 10,000 on a note payable, and exchanging $ 5000 in common stock.
Sold equipment for $ 10,000 that cost $ 18,000 and had accumulated depreciation of $ 6,000.
Sold marketable securities for $ 15,000 that cost $ 13,500.
What is the net cash flow provided or used from operations?
55,000
53,500
52,500
51,500
10 points
Question 3
Using the information from question #2, what was the amount of cash used to purchase equipment?
5,000
20,000
10,000
15,000
10 points
Question 4
Using the information from question #2, what is the amount of cash flow provided or used from financing?
36,000
23,000
24,000
31,000
a.55,000
b.53,500
c.52,500
d.51,500
Explanation / Answer
question2:
d.$51,500.
the following table shows the calculation of cash from operating activities.
question3:
A.$5,000.
cash to purchase equipment = cost of machine - note payable - common stock exchanged
=>$20,000 - 10,000 - 5,000 =>$5,000.
ques 4:
a. $36,000.
the following table shows it:
Net income $35,000 add: loss on sale of equipment ($18,000 - 6,000 - 10,000) $2,000 add: depreciation $15,000 add: dcerease in accounts receivable $4,000 add: increase in account payable $3,000 less: increase in prepaid insurance ($1,000) less: increase in inventory ($5,000) less: gain on sale of marketable assets (15,000 - 13,500) ($1,500) cash flow from operating activities $51,500Related Questions
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