On 31 December 2009, a company issued a £30,000 180-day note at 8 percent,using the cash received to pay for inventory, and issued £110,000 long-term debtat 11 percent annually, using the cash received to pay for new equipment. Whichof the following most accurately refl ects the combined eff ect of both transactions onthe company’s cash fl ows for the year ended 31 December 2009 under IFRS? Cashfl ows from:A . operations are unchanged.B . fi nancing increase £110,000.C . operations decrease £30,000.
On 31 December 2009, a company issued a £30,000 180-day note at 8 percent,using the cash received to pay for inventory, and issued £110,000 long-term debtat 11 percent annually, using the cash received to pay for new equipment. Whichof the following most accurately refl ects the combined eff ect of both transactions onthe company’s cash fl ows for the year ended 31 December 2009 under IFRS? Cashfl ows from:A . operations are unchanged.B . fi nancing increase £110,000.C . operations decrease £30,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 31 December 2009, a company issued a £30,000 180-day note at 8 percent,
using the cash received to pay for inventory, and issued £110,000 long-term debt
at 11 percent annually, using the cash received to pay for new equipment. Which
of the following most accurately refl ects the combined eff ect of both transactions on
the company’s cash fl ows for the year ended 31 December 2009 under IFRS? Cash
fl ows from:
A . operations are unchanged.
B . fi nancing increase £110,000.
C . operations decrease £30,000.
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