Viking Company was organized and began operating on January 1, Y5. The company’s
ID: 2480354 • Letter: V
Question
Viking Company was organized and began operating on January 1, Y5. The company’s balance sheet as of December 31, Y5, at the end of its first year of operations, appears below:
ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
Cash
$20
Accounts payable
$19
Accounts receivable
8
Long-term Notes payable
30
Prepaid expenses
5
Common stock
20
Land
13
Additional paid in capital
15
Equipment
62
Retained earnings
16
Accumulated depr, Equipment
(8)
Total Assets
$100
Total Liabilities and SE
$100
The company's income statement for the year includes depreciation expense of $8 and a gain on the sale of land of $2; the company reported net inocme of $20. During the year, Viking purchased two plots of land for a total of $25, and later sold one of the plots which had originally cost $12. Viking also paid dividends to the company's stockholders.
What is Viking's increase (decrease) in cash from operating activities?
$25
$20
$34
$32
none of the above
Refer to the information above for Viking Company.
The increase (decrease) from investing activities is
$(73)
$(75)
$(11)
$14
none of the above
Refer to the information above for Viking Company.
The net increase (decrease) in cash from financing activities is
$31
$61
$65
$69
none of the above
ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
Cash
$20
Accounts payable
$19
Accounts receivable
8
Long-term Notes payable
30
Prepaid expenses
5
Common stock
20
Land
13
Additional paid in capital
15
Equipment
62
Retained earnings
16
Accumulated depr, Equipment
(8)
Total Assets
$100
Total Liabilities and SE
$100
Explanation / Answer
Viking's net increase (decrease) in cash from operating activities:
The correct answer is d. $ 32
Increase (decrease) in cash from investing activities:
The correct answer is a. $ (73)
Net increase (decrease) in cash from financing activities is:
The correct answer is b. $ 61
Net income $ 20 Adjustments for non-cash and non-operating items Depreciation expense $ 8 Gain on sale of land $ (2) $ 6 Operating profit before working capital changes $ 26 Increase in accounts receivable $ (8) Increase in prepaid expenses $ (5) Increase in accounts payable $ 19 $ 6 Net cash flows from operating activities $ 32Related Questions
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