Jones Company Financial Information Dec 2007 Dec 2008 Net income $2,000 $5000 Ac

Question

Jones Company Financial Information
Dec 2007 Dec 2008
Net income $2,000 $5000
Accts. Receivable 750 750
Accumulated depreciation 1,000 1,500
Common stock 4,500 5,000
Paid-in capital 7,500 8,000
Retained earnings 1,500 2,500
accts. payable 750 750

Based on information, assuming that no common stock was repurchased during the year, the firm issued how much new common stock during 2008?
a. $1,500
b. $1,000
c $2,000
d. $500

Based on information, calculate the after tax cash flow from operations fro 2008 (no assets were disposed of during the year, and there was no change in interest or taxes payable)
a. $6,500
b. $3,375
c. $3,750
d. $5,500

Explanation / Answer

1) Option "d" is the correct answer since, Finding out the issuance of common stock: Common stock at 2007 - 4500 at 2008                         - 5000 Differane would be treated as as an Issued stock during the 2008.i...e $500 Option "d' is the corrct answer. since , Cash flow form opearions: Net income                               $5000 add: depreciation                         $500     [1000-1500] Total cash flow from operation = $5500

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