23Assume the following excerpts from a companys balance sheet:

	Beginning Balance				Ending Balance
Property, plant, and equipment	$	3,500,000			$	3,750,000
Long-term investments	$	950,000			$	1,100,000

During the year, the company sold a piece of equipment for $200,000. The equipment originally cost $500,000 and had accumulated depreciation of $290,000. The company did not sell any long-term investments during the period. Based solely on the information provided, the companys net cash provided by (used in) investing activities would be:Multiple Choice

• $(700,000).

• $700,000.

• $(100,000).

• $100,000.

24

Which of the following statements is true with respect to operating activities?

Multiple Choice

• They generate cash inflows and outflows related to acquiring or disposing of noncurrent assets.

• They generate cash flows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the companys owners.

• They generate cash inflows and outflows related paying dividends to stockholders and paying interest to lenders.

• They generate cash inflows and outflows related to revenue and expense transactions that affect net income.

25

Assume a company had net income of $60,000. It provided the following excerpts from its balance sheet:

	This Year				Last Year
Current assets:
Accounts receivable	$	46,000			$	46,000
Inventory	$	57,000			$	53,000
Current liabilities:
Accounts payable	$	42,000			$	49,000
Income taxes payable	$	14,000			$	14,000

If the company recorded a $5,000 loss on the sale of a noncurrent asset and its depreciation charges for the period were $21,000, then based solely on the information provided, the net cash provided by operating activities would be:

Multiple Choice

• $75,000.

• $65,000.

• $79,000.

• $87,000.