Packard Company engaged in the following transactions during Year 1, its first y

ID: 2520755 • Letter: P

Question

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)

1) Acquired $950 cash from the issue of common stock.

2) Borrowed $420 from a bank.

3) Earned $650 of revenues cash.

4) Paid expenses of $250.

5) Paid a $50 dividend.

During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)

1) Issued an additional $325 of common stock.

2) Repaid $220 of its debt to the bank.

3) Earned revenues of $750 cash.

4) Incurred expenses of $360.

5) Paid dividends of $100.

The net cash inflow from operating activities on Packard’s statement of cash flows for Year 2 is:

Multiple Choice

Top of Form

$390.

$650.

$350.

$820.

Net cash inflow from operating activities for Year 2 = 750-360= $390

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