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In Order to Prepare the Statement of Cash Flows for Rag

Question 163

Multiple Choice

In order to prepare the statement of cash flows for Rag Dolls Corporation for 2014, the accountant has compiled the following data regarding cash flows:
Cash paid to acquire equity securities. $370,000 Proceeds from sale of equity securities 17,500 Proceeds from issuance of ordinary shares280,000Proceeds from issuance of bonds payable. 55,000 Payments to settle short-term debt32,500 Interest and dividends received 10,000 Cash receipts from customers? Dividends paid 130,000 Cash paid to suppliers and employees 1,030,000 Interest paid 70,000 Income taxes paid 25,000 Cash and cash equivalents,1January, 2014 43,000 Cash and cash equivalents, 31 December 201458,000\begin{array}{llr} \text {Cash paid to acquire equity securities. } &\$370,000\\ \text { Proceeds from sale of equity securities } &17,500\\ \text { Proceeds from issuance of ordinary shares} &280,000\\ \text {Proceeds from issuance of bonds payable. } &55,000\\ \text { Payments to settle short-term debt} &32,500\\ \text { Interest and dividends received } &10,000\\ \text { Cash receipts from customers} &?\\ \text { Dividends paid } &130,000\\ \text { Cash paid to suppliers and employees } &1,030,000\\\text { Interest paid }&70,000\\ \text { Income taxes paid } &25,000\\ \text { Cash and cash equivalents,1January, 2014 } &43,000\\\text { Cash and cash equivalents, } 31 \text { December } 2014 &58,000\end{array}

Using the above information, indicate the best answer for each question in the space provided. (Assume interest and dividends received and paid are classified as operating activities)

-Rag Dolls' cash flow from operating activities during 2014 is:


A) $45,000 net cash from operating activities.
B) $1,155,000 net cash used in operating activities.
C) $240,000 net cash from operating activities.
D) $195,000 net cash from operating activities.

Correct Answer:

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