QUESTION 1

1. Selected financial statement information and additional data for Magnificent Co. is presented
below. Prepare a statement of cash flows for the year ending December 31, 2020.
                                                                                                December 31
                                                                                    2019                            2020
Cash.........................................................   $42,000                       $60,000
Accounts receivable (net)........................     84,000                       144,200
Inventory..................................................   168,000                       206,600
Land.........................................................     58,800                         26,000
Equipment................................................   504,000                       789,600
TOTAL......................................... $856,800                  $1,226,400
Accumulated depreciation.......................   $84,000                     $110,600
Accounts payable....................................     50,400                         91,000
Notes payable - short-term......................     67,200                         29,400
Notes payable - long-term.......................   168,000                       302,400
Common stock........................................   420,000                       487,200
Retained earnings....................................     67,200                       205,800
TOTAL......................................... $856,800                  $1,226,400
 
Additional data for 2020:
1.   Net income was $230,200.
2.   Depreciation was $26,600.
3.   Land was sold at its original cost.
4.   Dividends of $91,600 were paid.
5.   Equipment was purchased for $84,000 cash.
6.   A long-term note for $201,600 was used to pay for an equipment purchase.
7.  Common stock was issued to pay a $67,200 long-term note payable.
How much is the net cash provided (used) by operating activities? If your answer is used by, use
negative sign before the amount (e.g. -100,000)
160,800

5 points   
QUESTION 2
1. Selected financial statement information and additional data for Magnificent Co. is presented
below. Prepare a statement of cash flows for the year ending December 31, 2020.
                                                                                                December 31
                                                                                    2019                            2020
Cash.........................................................   $42,000                       $60,000
Accounts receivable (net)........................     84,000                       144,200
Inventory..................................................   168,000                       206,600
Land.........................................................     58,800                         26,000
Equipment................................................   504,000                       789,600
TOTAL......................................... $856,800                  $1,226,400
Accumulated depreciation.......................   $84,000                     $110,600
Accounts payable....................................     50,400                         91,000
Notes payable - short-term......................     67,200                         29,400
Notes payable - long-term.......................   168,000                       302,400
Common stock........................................   420,000                       487,200
Retained earnings....................................     67,200                       205,800
TOTAL......................................... $856,800                  $1,226,400
 
Additional data for 2020:
1.   Net income was $230,200.
2.   Depreciation was $26,600.
3.   Land was sold at its original cost.
 4.   Dividends of $91,600 were paid.
5.   Equipment was purchased for $84,000 cash.
6.   A long-term note for $201,600 was used to pay for an equipment purchase.
7.  Common stock was issued to pay a $67,200 long-term note payable.
How much is the net increase / (decrease) in cash for the current period? If your answer is decrease, use
a negative sign before the amount. (e.g. -100,000)
18,000

2 points   
QUESTION 3
1. Selected financial statement information and additional data for Magnificent Co. is presented
below. Prepare a statement of cash flows for the year ending December 31, 2020.
                                                                                                December 31
                                                                                    2019                            2020
Cash.........................................................   $42,000                       $60,000
Accounts receivable (net)........................     84,000                       144,200
Inventory..................................................   168,000                       206,600
Land.........................................................     58,800                         26,000
Equipment................................................   504,000                       789,600
TOTAL......................................... $856,800                  $1,226,400
Accumulated depreciation.......................   $84,000                     $110,600
Accounts payable....................................     50,400                         91,000
Notes payable - short-term......................     67,200                         29,400
Notes payable - long-term.......................   168,000                       302,400
Common stock........................................   420,000                       487,200
Retained earnings....................................     67,200                       205,800
TOTAL......................................... $856,800                  $1,226,400
 
Additional data for 2020:
1.   Net income was $230,200.
2.   Depreciation was $26,600.
3.   Land was sold at its original cost.
4.   Dividends of $91,600 were paid.
5.   Equipment was purchased for $84,000 cash.
6.   A long-term note for $201,600 was used to pay for an equipment purchase.
7.  Common stock was issued to pay a $67,200 long-term note payable.
How much is the net cash provided (used) by financing activities? If your answer is used by, use
negative sign before the amount (e.g. -100,000)
- 91,600

3 points   
QUESTION 4
1. Selected financial statement information and additional data for Magnificent Co. is presented
below. Prepare a statement of cash flows for the year ending December 31, 2020.
                                                                                                December 31
                                                                                    2019                            2020
Cash.........................................................   $42,000                       $60,000
Accounts receivable (net)........................     84,000                       144,200
Inventory..................................................   168,000                       206,600
Land.........................................................     58,800                         26,000
Equipment................................................   504,000                       789,600
TOTAL......................................... $856,800                  $1,226,400
Accumulated depreciation.......................   $84,000                     $110,600
Accounts payable....................................     50,400                         91,000
 Notes payable - short-term......................     67,200                         29,400
Notes payable - long-term.......................   168,000                       302,400
Common stock........................................   420,000                       487,200
Retained earnings....................................     67,200                       205,800
TOTAL......................................... $856,800                  $1,226,400
 
Additional data for 2020:
1.   Net income was $230,200.
2.   Depreciation was $26,600.
3.   Land was sold at its original cost.
4.   Dividends of $91,600 were paid.
5.   Equipment was purchased for $84,000 cash.
6.   A long-term note for $201,600 was used to pay for an equipment purchase.
7.  Common stock was issued to pay a $67,200 long-term note payable.
How much is the net cash provided (used) by investing activities? If your answer is used by, use negative
sign before the amount. (e.g. -100,000)
- 51,200

3 points   
QUESTION 5
1. Selected financial statement information and additional data for Magnificent Co. is presented
below. Prepare a statement of cash flows for the year ending December 31, 2020.
                                                                                                December 31
                                                                                    2019                            2020
Cash.........................................................   $42,000                       $60,000
Accounts receivable (net)........................     84,000                       144,200
Inventory..................................................   168,000                       206,600
Land.........................................................     58,800                         26,000
Equipment................................................   504,000                       789,600
TOTAL......................................... $856,800                  $1,226,400
Accumulated depreciation.......................   $84,000                     $110,600
Accounts payable....................................     50,400                         91,000
Notes payable - short-term......................     67,200                         29,400
Notes payable - long-term.......................   168,000                       302,400
Common stock........................................   420,000                       487,200
Retained earnings....................................     67,200                       205,800
TOTAL......................................... $856,800                  $1,226,400
 
Additional data for 2020:
1.   Net income was $230,200.
2.   Depreciation was $26,600.
3.   Land was sold at its original cost.
4.   Dividends of $91,600 were paid.
5.   Equipment was purchased for $84,000 cash.
6.   A long-term note for $201,600 was used to pay for an equipment purchase.
7.  Common stock was issued to pay a $67,200 long-term note payable.
Which of the following statements is correct about the statement of cash flows of Magnificent
Company?
I.  Payment of long-term note payable with issuance of $67,200 of common stock is a non-cash financing
activities which should not be included in the financing section of statement of cash flows.

II.  Payment for equipment with issuance of $201,600 long-term note is a non-cash investing activities which
should not be included in the investing section of the statement of cash flows.
Both I and II

I only

Neither I nor II

II only

2 points