Our company (a music store) engaged in the following transactions and activities during 2005 (its first year of operations):
1/1/2005 Issued common stock for $100,000 cash. Borrowed $400,000 cash from CountyBank. The money is to be repaid on 1/1/2008, along with interest.
1/2/2005 Purchased $100,000 of inventory on account, and paid $80,000 cash for equipment with a four-year life (and no salvage value).
4/1/2005 Paid $15,000 cash on the outstanding account created on 3/1/2005.
5/1/2005 Sold $30,000 of inventory for $200,000 on account. Paid a $17,000 dividend.
8/1/2005 Purchased land for $18,000 cash.
10/1/2005 Collected $125,000 from customers from the 5/1/2005 sale.
12/31/2005 At year-end, recorded one-year’s depreciation, accrued $40,000 interest on the bank loan, and reclassified some liability amount as current.
*What is the total (net) amount of cash flow from operating activities on your 12/31/2005 annual financial statements?
*What is the total (net) amount of cash flow from financing activities on your 12/31/2005 financial statements? Ignore whether this net amount is a cash inflow or a cash outflow.
What is the amount of net income on the 12/31/2005 financial statements?
i have the answers already. this is just a sample test. i just need someone to explain how to get them.
i just need to know how to get the answers. i do not need to prepare a cash flow statement since it is scantron multiple choice test. if u could explain how to get the answers i would greatly appreciate it.
