Use the following information to answer questions 1–3. Desert Products engaged in the following cash transactions during May: (Note: Answers in parentheses indicate net cash outflows.) Purchase of inventory $ 5,000 ( operating) Cash proceeds from loan $ 7,000 ( financing) Cash paid for interest $ 400 ( financing) Cash collected from sales $26,500 ( operating) New stock issued $25,000 ( financing) Salaries paid to employees $ 4,600 ( operating) Purchase of new delivery van $20,000 (investing ) 1. How much is net cash from financing activities? a. $ 7,000 b. $25,000 c. $32,000 d. $31,600 2. How much is net cash from investing activities? a. $(20,000) b. $(25,000) c. $ 25,000 d. $ 32,000 3. How much is net cash from operating activities? a. $26,500 b. $ (3,500) c. $16,900 d. $16,500 4. Cash from the sale of treasury stock a. would not be included in the statement of cash flows. b. would be classified as a contra-equity cash flow. c. would be classified as an investing cash flow. d. would be classified as a financing cash flow. 5. The cash proceeds from the sale of a building will be a. the cost of the building. b. the book value of the building. c. the book value plus any gain or minus any loss. d. shown on the financing portion of the appropriate financial statement. 6. If a firm has net investing cash inflows of $5,000; net financing cash inflows of $24,000; and a net increase in cash for the year of $12,000, how much is net cash from operating activities? a. Net cash inflow of $17,000 b. Net cash inflow of $29,000 c. Net cash outflow of $17,000 d. Net cash outflow of $19,000 7. Depreciation for the year was $50,000 and net income was $139,500. If the company’s transactions were all cash except those related to long-term assets, how much was net cash from operating activities? a. $139,500 b. $189,500 c. $ 89,500 d. It cannot be determined from the given information.
Use the following information to answer questions 1–3.
Desert Products engaged in the following cash transactions during May:
(Note: Answers in parentheses indicate net cash outflows.)
Purchase of inventory $ 5,000 ( operating)
Cash proceeds from loan $ 7,000 ( financing)
Cash paid for interest $ 400 ( financing)
Cash collected from sales $26,500 ( operating)
New stock issued $25,000 ( financing)
Salaries paid to employees $ 4,600 ( operating)
Purchase of new delivery van $20,000 (investing )
1. How much is net cash from financing activities? a. $ 7,000 b. $25,000 c. $32,000 d. $31,600
2. How much is net cash from investing activities? a. $(20,000) b. $(25,000) c. $ 25,000 d. $ 32,000
3. How much is net cash from operating activities? a. $26,500 b. $ (3,500) c. $16,900 d. $16,500
4. Cash from the sale of treasury stock
a. would not be included in the statement of cash flows.
b. would be classified as a contra-equity cash flow.
c. would be classified as an investing cash flow.
d. would be classified as a financing cash flow.
5. The cash proceeds from the sale of a building will be
a. the cost of the building. b. the book value of the building. c. the book value plus any gain or minus
any loss. d. shown on the financing portion of the appropriate financial statement.
6. If a firm has net investing cash inflows of $5,000; net financing cash inflows of $24,000; and a net
increase in cash for the year of $12,000, how much is net cash from operating activities?
a. Net
b. Net cash inflow of $29,000
c. Net
d. Net cash outflow of $19,000
7. Depreciation for the year was $50,000 and net income was $139,500. If the company’s transactions
were all cash except those related to long-term assets, how much was net cash from operating
activities? a. $139,500 b. $189,500 c. $ 89,500 d. It cannot be determined from the given
information.
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