Question

C Corp takes out a short-term loan of $12,000 on January 1st from Bank B. By December 31st, C Corp has completed payments totalling $12,960 to Bank B. How much does C Corp record in net investing cash flows related to this loan?

C Corp takes out a short-term loan of $12,000 on January 1st from Bank B. By December 31st, C Corp has completed payments totalling $12,960 to Bank B. How much does C Corp record in net operating cash flows related to this loan?

Alpha Investments records net income of $320 at the end of year. Over the year, A.I. recorded $50 in depreciation expenses, an increase in receivables of $20, and a decrease in payables of $30. Assuming there were no other changes in working capital accounts and no gains or losses, how much did A.I. record in operating cash flows?

Answer 1

For Part 1 and 2:

Borrowed short term loan $12,000

Repaid Amount $12,960

	Borrowed	Repaid
Cash Flow from Operating Activities	---	- 960
Cash Flow from Investing Activities	---	---
Cash Flow from Financing Activities	+ 12,000	- 12,000

Interest on the loan is Operating Activity and Payment of Principal amount is Financing Activity.

.

Part 3:

Net Income	320
Depreciation	50
Increase in Accounts Receivable	(20)
Decrease in Payables	(30)
Net Operating cash Flows	320