Question

1. Tripe H Enterprises reported $26,000 of cash from operating activities and the following data: Depreciation...

1. Tripe H Enterprises reported $26,000 of cash from operating activities and the following data:

Depreciation

$45,000

Increase in accounts payable

12,000

Increase in wages payable

8,000

Increase in inventory

9,000

Decrease in taxes payable

2,000

Tripe H's net income/loss for the period was

a. 10,000 income

b. 54,000 loss

c. 28,000 loss

d. 8,000 loss

2. McKim reported a cash position of $35,000 and as of December 31, after its first year of operations. McKim also reported the following:

Net Income

$23,000

Depreciation Expense

$17,000

Gain on the sale of equipment

$5,000

Cash from operating activities

$42,000

Cash used in investing activities

$100,000

How much cash was provided through McKim’s financing activities?

a. $100,000

b. $93,000

c. $90,000

d. $0

Homework Answers

Answer #1

Answer :

1. Option - C, 28,000 Loss

Explanation :

Tripe H's net income/loss for the period was

Particulars Amount (in $)
Cash flow from operating activities 26,000
Add: Decrease in taxes payable 2,000
Increase in stock 9,000
Less : Depreciation 45,000
Increase in accounts payable 12,000
Increase in wages payable 8,000
Net Income /(Loss) (28,000)

2. Option - B, $93,000

Cash balance as of December 31 = Cash from operating activities - Cash used in investing activities + Cash from Financing activities

$35,000 = $42,000 - $100,000 + Cash from Financing activities

$35,000 = -$58,000 + Cash from Financing activities

Cash from Financing activities = $35,000 + $58,000

Cash from Financing activities = $93,000

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