1. The following information was obtained from ABC's Statement of Cash Flows: Net cash flow from operating activities $120,000 Net cash flow from investing activities (Net cash flow used by investing activities) (90,000) Net flow from financing activities (net cash provided by financing activities) (25,000) Based on this information we could say that ABC: a. It appears to have purchased long-term assets with cash provided by operating and financing activities. b. It appears that it did not issue long-term debt. c. It appears that he did not buy shares. d. It appears to have purchased long-term assets and paid down debts with cash provided by operating activities. 2. The interest expense incurred is $50,000. The balance (balance) of interest payable at the beginning of the period was $5,000. The balance (balance) at the end of the period was $3,000. Using the direct method, determine the cash payment for interest. a. $55,000 b. $50,000 c. $52,000 d. $53,000
1. The following information was obtained from ABC's Statement of Cash Flows: Net cash flow from operating activities $120,000 Net cash flow from investing activities (Net cash flow used by investing activities) (90,000) Net flow from financing activities (net cash provided by financing activities) (25,000) Based on this information we could say that ABC: a. It appears to have purchased long-term assets with cash provided by operating and financing activities. b. It appears that it did not issue long-term debt. c. It appears that he did not buy shares. d. It appears to have purchased long-term assets and paid down debts with cash provided by operating activities. 2. The interest expense incurred is $50,000. The balance (balance) of interest payable at the beginning of the period was $5,000. The balance (balance) at the end of the period was $3,000. Using the direct method, determine the cash payment for interest. a. $55,000 b. $50,000 c. $52,000 d. $53,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. The following information was obtained from ABC's Statement of Cash Flows:
Net cash flow from operating activities $120,000
Net cash flow from investing activities (Net cash flow used by investing activities) (90,000)
Net flow from financing activities (net cash provided by financing activities) (25,000)
Based on this information we could say that ABC:
a. It appears to have purchased long-term assets with cash provided by operating and financing
activities.
b. It appears that it did not issue long-term debt.
c. It appears that he did not buy shares.
d. It appears to have purchased long-term assets and paid down debts with cash provided by operating
activities.
2. The interest expense incurred is $50,000.
The balance (balance) of interest payable at the beginning of the period was $5,000.
The balance (balance) at the end of the period was $3,000.
Using the direct method, determine the cash payment for interest.
a. $55,000
b. $50,000
c. $52,000
d. $53,000
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