$1$A

Consider the following three cash flows:

Cash paid to repay a loan

Cash paid for purchase of a building for use in operations

Cash paid for inventory purchases

Which ONE of the following sequences represents the CORRECT categorization of these three cash flows?

A Loan repayment $($investing$)$; building purchase $($operating$)$; inventory purchase $($financing$)$

B Loan repayment $($financing$)$; building purchase $($investing$)$; inventory purchase $($operating$)$

C Loan repayment $($financing$)$; building purchase $($investing$)$; inventory purchase $($investing$)$

D Loan repayment $($investing$)$; building purchase $($investing$)$; inventory purchase $($operating$)$

E Loan repayment $($investing$)$; building purchase $($operating$)$; inventory purchase $($operating$)$

F Loan repayment $($financing$)$; building purchase $($operating$)$; inventory purchase $($operating$)$

$1$B

Erda Company had the following transactions for $20$X$1.$

Payments of dividends $$11,250$

Depreciation expense $$22,500$

Income taxes paid $$27,000$

Proceeds received from sale of equipment $$225,000$

Utilities paid $$6,750$

Interest paid on note to local bank $$5,625$

Proceeds from issuance of common stock $$56,250$

Collections on accounts receivable $$337,500$

Payments on inventory $$168,750$

Payments for wages and salaries $$78,750$

Using the transactions above, compute the net cash flow from OPERATING activities.

A Negative $$225,000$

B Negative $$50,625$

C Positive $$50,625$

D Positive $$225,000$

E Positive $$523,125$

F Negative $$523,125$