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
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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