34. Mignon Company reported the following in its Statement of
Cash Flows:
Cash Flow from Operating Activities: $28,000
Cash Flow from Investing Activities: ?
Cash Flow from Financing Activities: $(37,000)
Beginning Cash Balance: $12,000
Ending Cash Balance: $29,000
Determine the Cash Flow from Investing Activities (parentheses
indicate cash outflow):
A.
$26,000
B.
($28,000)
C.
$16,000
D.
($18,000)
The answer is A, why? I want the explanations, thank you
Solution:
Net change in Cash = Ending Cash Balance - Beginning Cash Balance = $29000 - $12000 = $17,000
Now, also
Net Change in cash = Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities
$17000 = $28000 + Cash Flow from Investing Activities + ($37000)
Cash Flow from Investing Activities = $17000 - $28000 + $37000 = $26,000
Hence option "A" is correct.
34. Mignon Company reported the following in its Statement of Cash Flows: Cash Flow from Operating...
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