Marion Manufacturing had the following cash flows for the current year. The company uses the direct method in preparing the statement of cash flows. Cash receipts from issuance of stock $ 60,000Bonds payable issued at face value 250,000Cash dividends received from long-term investments 4,500Cash paid for wages 20,000Cash paid for dividends 5,000Cash received from customers 42,500Cash paid for other operating expenses 19,500Cash paid to purchase equipment 100,000 What is the net cash provided by (used in) operating activities?Multiple Choice$7,500$3,000($2,000)($37,500)
Question
Marion Manufacturing had the following cash flows for the current year. The company uses the direct method in preparing the statement of cash flows. Cash receipts from issuance of stock 7,5002,000)($37,500)
Solution
To calculate the net cash provided by (used in) operating activities, we need to consider only the cash flows related to operating activities. These include cash received from customers and cash paid for wages and other operating expenses.
Here's how to calculate it:
- Cash received from customers: $42,500
- Cash paid for wages: -$20,000
- Cash paid for other operating expenses: -$19,500
Net cash provided by operating activities = Cash received from customers - Cash paid for wages - Cash paid for other operating expenses
Net cash provided by operating activities = 20,000 - 3,000
So, the net cash provided by (used in) operating activities is $3,000.
Similar Questions
During the year, ABC Ltd received $50,000 from its customers, $5,000 for the sale of a motor vehicle and $20,000 for the issue of shares. It paid $27,000 to suppliers and employees, $3,000 for income tax and $50,000 for new machinery. Its cash balance at the beginning of the year was $30,000. What were the net cash flows from operating activities? a. $20,000 b. $25,000 c. $50,000 d. $23,000
Using the information below, calculate net cash flows from operating activities: Net income $120,000Receive cash from issuing stock 80,000Pay cash for equipment 90,000Increase in accounts receivable 10,000Depreciation expense 30,000Increase in accounts payable 5,000Receive cash from sale of land 75,000Pay cash dividends 20,000Multiple Choice$155,000.$190,000.$145,000.$115,000.
Oscar Ltd had a cash flow to suppliers of $2,840, a cash flow to shareholders of $1,630 last year. The firm spent a net of $1,420 on fixed assets and recovered working capital of $330. What was the company's operating cashflows?Group of answer choices-$5,560-$2,510-$1,750$4,900$5,560
For the current year, Davis Corporation’s statement of cash flows reveals the following information: Net cash flows from operating activities: $ 48,000Net cash flows from investing activities: $ 12,000Net cash flows from financing activities: $ 30,000Cash at the end of the year: $ 210,000What was the company’s cash balance at the beginning of the year?Multiple Choice$210,000$90,000$120,000$300,000
Cash flow from operations examines the:Group of answer choicesimpact of selling or acquiring current and fixed assetsrevenues, interest and dividends from investments held by the business.leasing, licensing, and rental agreements of the operations conducted by the business.increase or decrease in the short- and long-term debt position of the firm. PreviousNext
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.