The Will Company reported the following data for last year: Decrease in the cash account Net cash provided by operating activities Net cash provided by investing activities $ 25,000 20,000 15,000 Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be: O $2,000 O $(8,000) O $(60,000) O $(30,000)
The Will Company reported the following data for last year: Decrease in the cash account Net cash provided by operating activities Net cash provided by investing activities $ 25,000 20,000 15,000 Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be: O $2,000 O $(8,000) O $(60,000) O $(30,000)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
How do you solve this problem?
![**Financial Analysis and Cash Flow Statements**
The Will Company reported the following data for last year:
| | Amount |
|-----------------------------------|---------|
| Decrease in the cash account | \$25,000 |
| Net cash provided by operating activities | \$20,000 |
| Net cash provided by investing activities | \$15,000 |
Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:
- ○ \$2,000
- ○ \$(8,000)
- ○ \$(60,000)
- ○ \$(30,000)
**Explanation:**
To determine the net cash provided (used) by financing activities, we need to consider the overall perspective:
- The decrease in cash account = \$25,000, which indicates that cash went down by this amount.
- Net cash provided by operating activities = \$20,000
- Net cash provided by investing activities = \$15,000
Using the formula:
\[ \text{Net Cash from Financing Activities} = \text{Net Cash from Operating Activities} + \text{Net Cash from Investing Activities} - \text{Decrease in Cash Account} \]
Substituting the values:
\[ \text{Net Cash from Financing Activities} = 20,000 + 15,000 - 25,000 = 10,000 \]
Since none of the provided answers match this value, it suggests an error is imbedded. Review the data carefully, or consider additional context for accurate interpretation.
This section aids in understanding how to use basic financial data to determine cash flow specifics, essential for financial management and planning.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff13622a2-0b82-48fb-aeaf-28985a842310%2F7320b19d-fb39-4449-a0fa-042ebbbee57e%2Flkpv3br_processed.png&w=3840&q=75)
Transcribed Image Text:**Financial Analysis and Cash Flow Statements**
The Will Company reported the following data for last year:
| | Amount |
|-----------------------------------|---------|
| Decrease in the cash account | \$25,000 |
| Net cash provided by operating activities | \$20,000 |
| Net cash provided by investing activities | \$15,000 |
Based solely on this information, the net cash provided (used) by financing activities on the statement of cash flows would be:
- ○ \$2,000
- ○ \$(8,000)
- ○ \$(60,000)
- ○ \$(30,000)
**Explanation:**
To determine the net cash provided (used) by financing activities, we need to consider the overall perspective:
- The decrease in cash account = \$25,000, which indicates that cash went down by this amount.
- Net cash provided by operating activities = \$20,000
- Net cash provided by investing activities = \$15,000
Using the formula:
\[ \text{Net Cash from Financing Activities} = \text{Net Cash from Operating Activities} + \text{Net Cash from Investing Activities} - \text{Decrease in Cash Account} \]
Substituting the values:
\[ \text{Net Cash from Financing Activities} = 20,000 + 15,000 - 25,000 = 10,000 \]
Since none of the provided answers match this value, it suggests an error is imbedded. Review the data carefully, or consider additional context for accurate interpretation.
This section aids in understanding how to use basic financial data to determine cash flow specifics, essential for financial management and planning.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education