Travis Inc. has the following information available for 2009: Cash balance on 1/

Question

Travis Inc. has the following information available for 2009:

Cash balance on 1/1/2009 $3,000
Cash balance on 12/31/2009 5,000
Net cash provided by operating activities 70,000
Net cash utilized by investing activities 80,000

The financing activity section of Travis statement of cash flows would show:
a. Net cash provided by financing activities of $12,000.
b. Net cash utilized by financing activities of $2,000.
c. Net cash utilized by financing activities of $148,000.
d. Net cash provided by financing activities of $7,000.

Explanation / Answer

a. net cash provided by financing activities of 12,000. Cash account increased by 2,000. Since 70,000 was provided by operating activities and 80,000 was used by investing, 12,000 must have been provided by financing. 70,000 - 80,000 + 12,000 = 2,000 increase in cash account

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