1) Acquired $4,000 cash from issuing common stock.
2) Borrowed $2,200 from a bank.
3) Earned $3,100 of revenues.
4) Incurred $2,400 in expenses
5) Paid dividends of $500
The amount of total assets on La Fiesta's 2007 balance sheet was: a) $6,400 b) $5,400 c) $12,500 d) $5,700
My thought is that the assets are (4,000 + 2,200 + 3,100) - (2,400 +
500) = $6,400. Is this correct?
2) Farr company earned $1,000 of cash revenue, paid $400 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true? a) The net cash flow from operating activities was $600. b) The net cash flow from investing activities was an outflow or decrease of $200 c) The net cash flow from operating activities was $400 d) Cash flows from financing activities were unchanged.
My choice is c) The net cash flow from operating activities was $400. The $200 cash dividend was a financing activity.
3) During 2008, Mueller 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
4) Incurred expenses of $360
5) Paid dividends of $100
The amount of retained earnings on Mueller's 2008 balance sheet is: a) $1,125. b) $1,790. c) $490. d) $290.
My guess is d) $290. (750 - 360 - 100) Is that correct?