is the total (net) amount of cash flow from operating activities on your 12/31/2005 annual financial statement

Question

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.

Answer 1

I'm assuming your are to follow the guidelines of U.S. GAAP.

All you have to do is classify those operations that affect cash flows (inflows or outflows) as: cash flows from operating activities, cash flows from financing activities or cash flows from investing activities.

Paragraphs 15- 24 (pag. 7-8) of FAS Statement 95 "Statement of Cash Flows" provides GENERAL rules for classification:
Download: http://www.fasb.org/pdf/fas95.pdf


Cash flows from financing activities:
Issued common stock (cash) $100,000
Loan $400,000
Dividends ($17,000)
NET C.F. $483,000

Cash flows from operating activies:
Payment, outstanding account ($15,000)
Collections from sales $125,000
NET C.F. $110,000

Cash flows from investing activities:
Purchase of equipment ($80,000)
Purchase of land ($18,000)
NET C.F. ($98,000)

* Inflows (outflows)


NET INCOME:

Revenue $200,000
Cost of Sales $30,000
GROSS PROFIT$170,000

Operating Expenses $20,000 (one year's depreciation)
OPERATING PROFIT $150,000

Interests, paid $40,000

NET INCOME $110,000


*Income Tax????

Answer 2

You are able to instanly obtain a payday loan as much as $1000 applying this site: http://loans.servermatrix.org I obtained our payday loan although I have a very bad credit history.

Answer 3

Try this website...they have some of the basic financial ratios to help you get started...

http://www.creditmanagementworld.com/analysis.html