Question

Each of the following independent situations represents amounts shown on the four basic financial statements. Fill in the formulas and missing blanks using your knowledge of amounts that appear on the financial statements.
  

1. Revenues = $25,400; Expenses = $17,200; Net income = ____________.
2. Increase in stockholders' equity = $15,000; Issuance of common stock = $12,000; Net income = $11,200; Dividends = ____________.
3. Assets = $23,200; Stockholders' equity = $16,000; Liabilities = ____________.
4. Total change in cash = $24,400; Net operating cash flows = $32,400; Net investing cash flows = ($15,400); Net financing cash flows = ____________.

Answer 1

Answer 1:

Revenues = $25,400; Expenses = $17,200; Net income = 25400 - 17200 = $8,200

Net income = $8,200

Answer 2:

Increase in stockholders' equity = $15,000; Issuance of common stock = $12,000; Net income = $11,200;

Dividends = Issuance of common stock + Net income - Increase in stockholders' equity = 12000 + 11200 - 15000 = $8,200

Dividends = $8,200

Answer 3:

Assets = $23,200; Stockholders' equity = $16,000; Liabilities = Assets - Stockholders' equity = 23200 - 16000 = $7,200.

Liabilities = $7,200

Answer 4:

Total change in cash = $24,400; Net operating cash flows = $32,400; Net investing cash flows = ($15,400);

Net financing cash flows = Total change in cash - (Net operating cash flows + Net investing cash flows )

= 24400 -(32400 -15400)

= $7,400

Net financing cash flows = $7,400