Question

39

Train's, Inc. plans to sell 4,000 backpacks during May; 3,800 in June, and 5,000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Train's produce during June?

Select one:

A. 3,980

B. 4,550

C. 3,620

D. Not enough information to determine.

E. None of the above.

40.

Jost's Co. had the following transactions during 2019:

1.	Issued $50,000 of par value common stock for cash.
2.	Repaid a 6 year note payable in the amount of $22,000.
3.	Acquired land by issuing common stock of par value $100,000.
4.	Declared and paid a cash dividend of $2,000.
5.	Sold a long-term investment (cost $3,000) for cash of $8,000.
6.	Acquired an investment in IBM stock for cash of $15,000.

What is the net cash provided (used) by investing activities?

Select one:

A. $15,000

B. $33,000

C. ($7,000)

D. $8,000

E. None of the above.

Answer 1

39.

Units sold in June = 3,800

Ending inventory = 5,000 X 15% = 750

Beginning inventory = 3,800 X 15% = 570

Units to be produced = 3,800 + 750 - 570

= 3,980 Units

Option A

40.

Net cash provided (used) by investing activities:

= Cash inflows from sales of long-term investment - Cash outflow from purchase of investment in IBM stock

= $8,000 - $15,000

= ($7,000)

Option C.