Question

1. Edgewater Co. has the following December 31, 2018 equity balances: Common stock of $56,000; Additional paid-in capital of $84,000; and Retained earnings of $140,000. If Edgewater repurchases shares of its stock for $28,000, the total stockholders' equity balance would equal:

2.Harlow Industries reported net income of $24,500 for the current year. During the year, Inventory decreased by $7,800, Accounts Payable decreased by $8,400, Depreciation Expense was $10,800, and Accounts Receivable increased by $7,300. If the indirect method is used, what is the net cash provided by operating activities?

• $44,200

• $11,300

• $27,400

• $58,800

3.

The purchase of $119,000 of equipment by issuing a note would be reported:

Multiple Choice

• as a $119,000 investing outflow, and a $119,000 financing inflow.

• as a $119,000 investing inflow, and a $119,000 financing outflow.

• as a $119,000 operating inflow, and a $119,000 financing outflow.

• in a supplementary schedule

4.

Company X paid Company Y $2.85 million for a new plant. During the same accounting period, Company X experienced the following changes in its balance sheet: Cash decreased by $358,000, Accounts Receivable increased by $322,800, Inventory increased by $277,300, Property, Plant, and Equipment increased by $754,400, and Bonds Payable increased by $3 million. The net cash flow provided by financing activities is:

Multiple Choice

• An inflow of $754,400.

• An inflow of $2.85 million.

• An outflow of $358,000.

• An inflow of $3 million.

Answer 1

Calculation of Total stockholders equity:

Total stockholders equity = Common stock+Additional paid in capital+Retained earnings-Treasury stock

= 56,000+84,000+140,000-28,000

= 252,000

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