MGMT 30A at University of California--Irvine

7. Comprehensive Cash Flow

in Topic 13 (Problem 7 of 7)

The Murray Company reported the following income statement for the current year and two years of balance sheet information.

Sales 440,000
Gain on sale of equipment 6,000
  Total revenue   446,000
Expenses
  Cost of Goods Sold 285,000  
  Wages Expense 60,000  
  Rent Expense 24,000  
  Depreciation Expense 15,000  
  Insurance Expense 12,000 396,000
Net Income   50,000

Balance Sheets

Year 2 Year 1
Cash 5,000 4,000
Accounts Receivable 48,000 42,000
Inventory 60,000 76,000
Prepaid Insurance 6,000 4,000
Land 20,000 10,000
Building, net 90,000 100,000
Equipment, net 60,000 60,000
Total Assets 289,000 296,000
 
Accounts Payable 28,000 16,000
Wages Payable 5,000 8,000
Long-term Notes Payable 53,000 100,000
Common Stock 157,000 150,000
Retained Earnings 46,000 22,000
Total Liabilities + SHE 289,000 296,000

Equipment with a book value of 10,000 was sold for cash. Depreciation expense on the building was 10,000. The remainder of depreciation expense was attributable to equipment.

Q1: The amount of cash generated from operations this year was:

  1. 30,000
  2. 42,000
  3. 59,000
  4. 76,000
  5. 82,000

Q2: The cash payment for dividends was:

  1. 23,000
  2. 24,000
  3. 26,000
  4. 29,000

Q3: The cash inflow (outflow) from investing activities was:

  1. (9,000)
  2. (6,000)
  3. (4,000)
  4. (15,000)
  5. 6,000

Q4: The cash inflow (outflow) from financing activities was:

  1. (40,000)
  2. 31,000
  3. (78,000)
  4. (66,000)
In the video I forgot to subtract the 26,000 dividend. The answer is 66k, not 40k. Thanks R.R. for pointing this out!
Watch Solution (9:56) Hide Solution Reveal Solution

The Rest Of The Practice Problems

Click Here to View All Topic 13 Problems at Once View
1 Depreciation in Indirect Cash Flows Easy
2 Investing Activity Classification Easy
3 Operating Activities, Indirect Method Easy
4 Cash Flows and Gains Moderate
5 Gain on Sale of Equipment Moderate
6 Investing vs Financing Moderate
7 Comprehensive Cash Flow
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Topic 13 Videos

1 Cash Flow Overview 6:02
2 Operating Cash Flows 18:41
3 Indirect Method 14:26
4 Investing Cash Flows 5:14
5 Financing Cash Flows 3:17
6 Depreciation in Cash Flows 5:50
7 PPE for Cash Flows 2:39
8 Bringing it All Together 13:57