Please show work and explain where nessecery. 5 Net cash flows from operating ac
ID: 2532955 • Letter: P
Question
Please show work and explain where nessecery.
5 Net cash flows from operating activities on the cash flows statement for 2017 are?
A) Negative $17,670.
B) Positive $35,330.
C) Positive $39,830.
D) Negative $70,670.
6 Net cash flows from investing activities on the cash flows statement for 2017 are?
A) Negative $225,000.
B) Negative $65,000.
C) Negative $70,500.
D) Negative $145,000.
7 Net cash flows from financing activities on the cash flows statement for 2017 are?
A) Negative $130,000.
B) Positive $150,000.
C) Positive $130,000.
D) Negative $70,000.
Use the following to answer questions 5 through 7: The Smirnoff Corporation prepared the following comparative balance sheets at December 31, 2017 and 2016 12/31/17 S 77,375 15,500 80,000 165,000 12/31/16 Cash Marketable securities Accounts receivable Inventory Prepaid insurance Land, buildings, and equipment Accumulated depreciation Total assets S (22,955) 85,000 68,250 145,000 2,000 1,125,000 1,500 1,250,000 (610,000) S 979,375 (572,000) S 830,295 Accounts payable Salaries payable Notes payable Bonds payable Common stock Retained earnings Total liabilities and shareholders' equity S 76,340 20,000 25,000 200,000 300,000 358,035 S 979,375 S 102,760 24,500 75,000 0 300,000 328,03 S 830,295 Additional information for the year ended December 31, 2017: (1.) Sold available-for-sale securities costing S69,500 for $74,000 (2.) Equipment costing $20,000, with a book value of $5,000, was sold for S6,000 (3) Issued 6% bonds payable at par (4.) Repaid a portion of a long term bank loan. (5.) Purchased new equipment for $145,000 cash. (6.) Paid cash dividends of S20,000 (7.) Net income for 2017 was $50,000 (8.) Smirnoff prepares its cash flows statement under the indirect method.Explanation / Answer
Answer 5 Calculation of net cash flows from operating activities on the cash flows statement for 2017 Net Income $50,000.00 Depreciation Expense $53,000.00 Gain on sale of available for sale securities -$4,500.00 Gain on sale of equipment -$1,000.00 Increase in Accounts Receivables -$11,750.00 Increase in Inventory -$20,000.00 Decrease in Prepaid insurance $500.00 Decrease in Accounts Payable -$26,420.00 Decrease in Salaries Payable -$4,500.00 Net Cash flow from Operating Activities $35,330.00 The answer is Option B. Answer 6 Calculation of Net cash flows from investing activities on the cash flows statement for 2017 Sale of Marketable securities $74,000.00 Sale of equipment $6,000.00 Purchase of new equipment -$145,000.00 Net cash flows from Investing activities -$65,000.00 The answer is Option B. Answer 7 Calculation of Net cash flows from financing activities on the cash flows statement for 2017 Repayment of Notes Payable -$50,000.00 Issue of Bonds Payable $200,000.00 Dividend paid -$20,000.00 Net Cash flow from Financing activities $130,000.00 The answer is Option C.