A company had a net income of 50,000 last year. Depreciation was 30,000, they pa

ID: 2486149 • Letter: A

Question

A company had a net income of 50,000 last year. Depreciation was 30,000, they paid 5,000 in dividends, bought 100,000 machine for cash and got 20,000 loan form the bank. Payables, recieveables and inventory, were the same at the start and the end of the year. THey started the year with 20,000 of cash in their account.

How much cash did they have at the end of the year?

EXTRA CREDIT PROBIEMS had a $30.or Dts,) s30,000, they pe (10 pts .) A company 000 )A co a $20 start in dividends, t Said Ss.0 u et ineome ot 330ou tast year hepreeiation was loan from a bank. Pavables, receivables anid and end of the abankends, trought a s100500 machine tor cash and get end of t es, receivables and mventony were the same at the year They How much cash did they have at the end of the ey started the year with $20.960 cash in their acciint t the end of the year?

Explanation / Answer

Cash at end

Cash from operating activities

Net Income 50,000

Add: Depreciation expense 30,000

Cash from operating activities 80,000

Cash from investing activities

Cash paid for machine purchase -100,000

Cash from financing activity

Cash from bank loan 20,000

Cash dividend paid -5,000

Cash provided by financing activities 15,000

Net cash decrease -5,000

Add cash at the beginning 20,000

Cash at the end 15,000