Question

In order to prepare the statement of cash flows for Rag Dolls Corporation for 2010, the accountant has compiled the following data regarding cash flows:

                  Cash paid to acquire marketable securities.......................................... $  370,000

                  Proceeds from sale of marketable securities............................................. 17,500

                  Proceeds from issuance of capital stock................................................... 280,000

                  Proceeds from issuance of bonds payable.................................................. 55,000

                  Payments to settle short-term debt............................................................ 32,500

                  Interest and dividends received................................................................... 10,000

                  Cash received from customers.............................................................................. ?     

                  Dividends paid............................................................................................ 130,000

                  Cash paid to suppliers and employees.................................................... 1,030,000

                  Interest paid................................................................................................. 25,000

                  Income taxes paid........................................................................................ 70,000

                  Cash and cash equivalents, January 1, 2010................................................ 43,000

                  Cash and cash equivalents, December 31, 2010.......................................... 58,000

                  Using the above information, indicate the best answer for each question in the space provided.

                 3       Rag Dolls’ cash flow from operating activitiesduring 2010 is:

                          a       $45,000 net cash provided by operating activities.

                          b       $1,155,000 net cash used by operating activities.

                          c       $240,000 net cash provided by operating activities.

                          d       $195,000 net cash provided by operating activities.

                 4       In the 2010 statement of cash flows for Rag Dolls Corporation, the amount of cashreceived from customersis:

                          a       $1,310,000.

                          b       $1,103,000.

                          c       $1,233,000.

                          d       $1,293,000.

I need step by step solution to these two questions.

Answer 1

cash flow from operating activities Cash and cash equivalents, 31 December 2010 Cash and cash equivalents, 1 January, 2010 cash flow from investing activities (Note 1 cash flow from financing activities (Note 2 net cash provided by operating activities Hence option d is correct 58,000 43,000 352,500 172,500 195,000 Cash receipts from customers net cash provided by operating activities 195,000 1,030,000 25,000 70,000 10,000 1,310,000 Cash paid to suppliers and employees Interest paid Income taxes paid Interest and dividends received Cash receipts from customers Hence option a is correct. Note 1: cash flow from investing activities Cash paid to acquire equity securities Proceeds from sale of equity securities net cash used by investing activities 370,000 17,500 352,500 Note 2: cash flow from financing activities Proceeds from issuance of ordinary sha res Proceeds from issuance of bonds payable Pavme nts to settle short term debt Dividends paid 280,000 55,000 32,500 130,000 172,500 net cash provided by financing activities