$40,000
A company's activities are divided into three categories: (1) operating activities, (2) investing activities, and (3) financing activities. Operating activities include selling products and/or services, paying suppliers (e.g., buying inventory), employees workers, etc. Cash flows from operating activities are increases by collecting cash for operating activities (e.g., collecting cas from customers) and decreased by paying cash for operating activities (e.g., paying
cash to employees for hours worked, paying cash to suppliers for inventory, etc.). This company's net cash provided by operating activities include (i) cash collected from customers, (ii) salaries paid for salaries, and (iii) cash paid for goods and services
Net cash flow provided by operating activities = $260,000 - 130,000 - 90,000 = $40,000
Note: Not all cash collections and/or cash payments are operating activities. Some are investing activity cash flows (e.g., paying for property,
plant, and equipment, etc.) and others are financing activity cash flows (e.g., paying dividends to shareholders, collecting cash from lenders [e.g., borrowing from banks], etc.).
Fundamentals of Financial Management, Concise Edition
10th EditionEugene F. Brigham, Joel Houston
777 solutions
Essentials of Investments
9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
689 solutions
Accounting: What the Numbers Mean
9th EditionDaniel F Viele, David H Marshall, Wayne W McManus
345 solutions
Financial Accounting
4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas
1,097 solutions
If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is considered by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:
If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:
A. Assets increase $1,300 and liabilities decrease $1,300.
B. One asset increases $1,300 and another asset decreases $1,300, causing no effect.
C. Assets decrease $1,300 and equity decreases $1,300.
D. Assets decrease $1,300 and equity increases $1,300.
E. Assets increase $1,300 and liabilities increase $1,300.
If a company receives $12,000 from the owner to establish a proprietorship, the effect on the accounting equation would be:
A. Assets decrease $12,000 and equity decreases $12,000.
B. Assets increase $12,000 and liabilities decrease $12,000.
C. Assets increase $12,000 and liabilities increase $12,000.
D. Liabilities increase $12,000 and equity decreases $12,000.
E. Assets increase $12,000 and equity increases $12,000.
On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of May 31 of the current year?
Recommended textbook solutions
Operations Management: Sustainability and Supply Chain Management
12th EditionBarry Render, Chuck Munson, Jay Heizer
1,698 solutions
Human Resource Management
15th EditionJohn David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine
249 solutions
Human Resource Management
15th EditionJohn David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine
249 solutions
Service Management: Operations, Strategy, and Information Technology
7th EditionJames Fitzsimmons, Mona Fitzsimmons
103 solutions