During the year,the Abbot Company had cash flow from operating activities of $133,000 and the following changes in account balances:
1)The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000.The increase was due to depreciation expense.
2)The long-term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000.The decrease was due to repayment of debt.
3)The Accounts Receivable account had a beginning balance of $60,000 and an ending balance of $50,000.
4)The Equipment account had a beginning balance of $25,000 and an ending balance of $92,500.The increase was due to the purchase of equipment for cash.
5)The Long-Term Investments account (marketable securities)had a beginning balance of $18,000 and an ending balance of $12,500.The decrease was due to the sale of investments at cost.
6)The amount of cash dividends declared and paid during the year was $22,000.
7)The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250.
What was the net change in cash?
A)$24,000
B)$12,000
C)$10,000
D)($24,000)

Question

Quizplus · Accepted Answer

The net change in cash is the cash flow from operating activities plus the changes in the non-cash current assets and liabilities. The increase in Accumulated Depreciation and the decrease in Notes Payable are both sources of cash. The decrease in Accounts Receivable and the increase in Equipment are both uses of cash. The decrease in Long-Term Investments is a source of cash. The payment of cash dividends is a use of cash. The decrease in Interest Payable is a source of cash. Therefore, the net change in cash is $133,000 + $10,000 - $10,000 - $42,500 + $5,500 - $22,000 + $1,000 = $24,000.

During the Year,the Abbot Company Had Cash Flow from Operating