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.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 $750.4) Incurred expenses of $360.5) Paid dividends of $100.

 

 

 

3.1)        What is Packard Company's net cash flow from financing activities for Year 2?

  
   A)    $320 outflow.    
   B)    $220 outflow.
   C)    $225 inflow.
   D)    $5 inflow.
  

3.2)        What was the balance of Packard's Retained Earnings account before closing in Year 1?

   A)    $0           
   B)    $400
   C)    $350
   D)    $450
  

3.3)        What is the amount of total stockholders’ equity that will be reported on Packard’s balance sheet at the end of Year 1?

   )    $900          
   B)    $1,350
   C)    $1,300
   D)    $250
  

3.4)        What is the after-closing amount of retained earnings that will be reported on Packard’s balance sheet at the end of Year 2?(Assume that closing entries have been

   A)    $800       
   B)    $290
   C)    $740
   D)    $640
  

3.5)        What is the amount of assets that will be reported on Packard’s balance sheet at the end of Year 2?

   A)    $2,115    
   B)    $395
   C)    $2,215
   D)    $440
  

3.6)        What is the net cash inflow from operating activities that will be reported on Packard’s statement of cash flows for Year 1?

            A)    $350       
            B)    $400
            C)    $820
            D)    $650

Answer 1