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Balance sheet Which of the following actions are most likely to directly increase cash as shown on a firms balance sheet? Explain and state the

Balance sheet

Which of the following actions are most likely to directly increase cash as shown on a firms balance sheet? Explain and state the assumptions that underlie your answer.

  1. It issues $3 million of new common stock.
  2. It buys new plant and equipment at a cost of $3 million.
  3. It reports a large loss for the year.
  4. It increases the dividends paid on its common stock.
  5. Statements (b) and (d) will increase the amount of cash on a company's balance sheet. Statement (a) will decrease cash through the sale of common stock. Selling stock provides cash through financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year.
  6. Statements (b) and (d) will increase the amount of cash on a company's balance sheet. Statement (a) will increase cash through the sale of common stock. Selling stock provides cash through financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year.
  7. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. Statement (a) will increase cash through the sale of common stock. Selling stock provides cash through financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year.
  8. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. Statement (a) will decrease cash through the sale of common stock. Selling stock provides cash through financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year.
  9. Statements(b)and(d)willdecreasetheamountofcashonacompany'sbalancesheet.Statement(a)willincreasecashthroughthesaleofcommonstock.Sellingstockprovidescashthroughfinancingactivities.Statement(c)wouldneitherincreaseordecreasecashfortaxespaidinaprioryear.

pick one!!

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