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Question 2 The following information is necessary to answer questions 2, 3, and 4: Increase...

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Question

Accounting

Question 2

The following information is necessary to answer questions 2, 3, and 4:

Increase in prepaid insurance 1000; Goodwill 2000; Equipment Depreciation expense 15000; Increase in accounts payable 3000; Net income 35000;Issuance of common stock 12000; Increase in inventory 5000; Payment of dividends 9000; Increase in bonds payable 7000;Decrease in accounts receivable 4000; increase in mortgage payable 26000;

Addditional information: Purchased equipment for $ 20,000, financing $ 10,000 on a note payable, and exchanging $ 5000 in common stock.

Sold equipment for $ 10,000 that cost $ 18,000 and had accumulated depreciation of $ 6,000.

Sold marketable securities for $ 15,000 that cost $ 13,500.

What is the net cash flow provided or used from operations?

a.

55,000
b.

53,500
c.

52,500
d.

51,500

10 points

Question 3

Using the information from question #2, what was the amount of cash used to purchase equipment?

a.

5,000
b.

20,000
c.

10,000
d.

15,000

10 points

Question 4

Using the information from question #2, what is the amount of cash flow provided or used from financing?

a.

36,000
b.

23,000
c.

24,000
d.

31,000

Answer & Explanation Solved by verified expert
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