Quiz 6 for Cash Flow Use the following information to answer

Quiz #6 for Cash Flow Use the following information to answer the next three questions. Comparative Balance Sheet 20X120X2 Cash Accounts Receivable Prepaid Rent Inventory Land 500 $ 200300 decYesse 2,20010o 1,000 3,000 -42.000 5,000 8,000 _ 3000 13,000 19,000?? Total Assets S23,500 $32,400 S 6,500 S12,000 - SS Acct. Payable Note Payable Common Stock 10,000 7,000 3000 1,500 6,400 4,9ob Retained Earnings 5,500 7,000, sou Total Equity S23,500 S32,400 S CE DA Income Statement 20X2 $ 20,000 Revenue Cost of Goods Sold (15,200) IA Gross Margin Rent Expense 4,800 (1.000) FA PH Net Income s 3,800 1. The amount of net cash flow from operating activities for 20X2 was S9,100. $6,100. c. S 600. d. $18,800. 2. The amount of net cash flow from investing activities for 20X2 was a. S(9,000) b. S(1,000). $(6,000) S(4,000).

Solution

1) b . $6,100

Net Cash Flow from Operating Activities = Net Income +Adjustment to reconcile

= $3,800 + 1,800 -$3,000 - $2,000 + $5,500

= $6,100

2) C $(6,000)

Net Cash Flow from Investing activities = Cash Outflow on purchase of Land

= $19,000 - $13,000

= $6,000