1. New England Co. had net cash provided by operating activities of $351,000; ne
ID: 2510172 • Letter: 1
Question
1. New England Co. had net cash provided by operating activities of $351,000; net cash used by investing activities of $420,000; and cash provided by financing activities of $250,000.
New England's cash balance was $27,000 on January 1.
What was New England's cash balance at the end of the year?
A. $40,000
B. $208,000
C. $248,000
D. $27,000
2. In a statement of cash flows, cash receipts from sales of inventory to customers should generally be classified as cash inflows from
A. investing activities
B.operating activities
C.financing activities
D.selling activities
3. Which of the following is a contra account?
A. Premium on bonds payable
B.Allowance for doubtful accounts
C.Patents
D.Unearned revenue
Average Cost
LIFO
Average Cost
LIFO
Explanation / Answer
1.A
Cash Flow statement Of New englands
Cash from operating Activities 351000
Cash From Investing Activities (420000)
Cash From Financing Activities 250000
Net Change In Cash 181000
Add Cash At The Beginning 27000
Cash at The End of the year 208000
Assuming That Cash from Investing activities is negative
1.B
Sale Of Inventory Should Always be recorded In The Cash flow from operating activities as we find the changes in working capital in Operating activites only
1.C
Allowance Of bonds payable is a contra account where it is used twice once in operating activities and other in investing activities
4.D Answer is A
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