Question

5. Woof Dog Food Co. reported net income of $44,500 for the year ended December 31, 2003. January 1 balances in accounts receivable and accounts payable were $23,000 and $26,000 respectively. Year-end balances in these accounts were $22,000 and $28,000 respectively. Depreciation expense for the period was $500. Assuming that all relevant information has been presented, Woof's cash flows from operating activities would be: A) $48,000 B) $44,000 C) $46,000 D) $45,000 6. Reba wishes to know how much would be in her savings account if she deposits a given sum in an account and leaves it there at a 6% interest for five years. She should use a table for the: A) Future value of an ordinary annuity of 1 B) Future value of 1 C) Future value of an annuity of 1 D) Present value of an annuity due of 1 7. LeAnn wishes to know how much she should set aside now at 7% interest in order to accumulate a sum of $5,000 in four years. She should use a table for the: A) Present value of 1 B) Future value of 1 C) Present value of an ordinary annuity of 1 D) Future value of an annuity due of 1 At the end ofanob quarter Dotti donit AA : 10

Answer 1

5 a

Net income. 44500

Add dep. 500(non cash expenses)

Decrease is receivable. 1000(changes in working capital)

Increase in payables. 2000

Cash flows from operating activities 48000

Note:

Increase in current assets. Add to net income

Decrease in current assets less from net income

Increase in current liabilities. Add to net income

Decrease in current liabilities less from net income

6 b

She have a single present value with her

She want to know future value of present rupee invested after 5 years

7 a

LeAnn want 5000 after 4 years which is a future value

Want to find out present value

She need to discount the value of 5000 as regards to rate and time unsing pv table