Question

1. The following transactions occurred last year at Jolly Corporation:

Issuance of shares of the company's own common stock	$	120,000
Dividends paid to the company's own shareholders	$	1,000
Sale of long-term investment	$	7,000
Interest paid to lenders	$	13,000
Retirement of the company's own bonds payable	$	60,000
Proceeds from sale of the company's used equipment	$	8,000
Purchase of property	$	170,000

Based solely on the above information, the net cash provided by (used in) financing activities for the year on the statement of cash flows would be:

Multiple Choice

• $179,000

• $59,000

• $(109,000)

• $46,000

2. Kaze Corporation’s cash and cash equivalents consist of cash and marketable securities. Last year the company’s cash account increased by $25,000 and its marketable securities account decreased by $15,000. Net cash provided by (used in) operating activities was $38,000. Net cash provided by (used in) investing activities was $9,000. Based on this information, the net cash provided by (used in) financing activities on the statement of cash flows was:

Multiple Choice

• $(37,000).

• $37,000.

• $(47,000).

• $47,000.

Answer 1

1)

$46000.

Explanation:

Jolly Corporation
Cash Flow statement (Partial)
Cash flow from financing Activities:
Issuance of common stock	$120000
Interest paid to lenders	($13000)
Retirement of Bond payable	($60000)
Dividend paid	($1000)
Net cash provided by Financing Activities	$46000

2)

($37000)

Explanation:

Net increase in cash and cash equivalent = $25000 - $15000 = $10000

Net increase in cash and cash equivalent = Net cash provided or (used in) by operating Activities + Net cash provided or (used in ) by investing Activities + Net cash provided or (used in ) by Financing Activities

$10000 = $38000 + $9000 + Net cash provided or (used in ) by Financing Activities

$10000 = $47000 + Net cash provided or (used in ) by Financing Activities

Net cash provided or (used in ) by Financing Activities = $10000 - $47000 = - $37000.