Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q1) Cash used in the investing activities in 2021 was a) 97000$ b) 75000$ c) 90000$ d) 170000$ Q2) Interest paid in 2021 was a)

image text in transcribed

Q1) Cash used in the investing activities in 2021 was

a) 97000$

b) 75000$

c) 90000$

d) 170000$

Q2) Interest paid in 2021 was

a) 3500

b) 1500

c) 8500

d) 5000

The comparative summary statement of financial position for Gnat Ltd. as at December 31 follows: 2021 2020 Cash and cash equivalents $ 26,000 $ 90,000 Trade receivables 53,000 62,000 Inventories held for resale 41,000 29,000 Buildings and equipment, net 287,000 240,000 Total $407,000 $421.000 Trade payables Bank loan Interest payable Income taxes payable Contributed capital (common shares) Retained earnings Total $ 16,000 0 4,000 5,000 122,000 260,000 $407,000 $ 27,000 88,000 2,500 7,000 100,000 196,500 $421,000 Income statement information for Gnat Ltd. for 2021 is shown below: Sales Cost of sales Operating expenses Operating income Interest expense Gain on sale of equipment Pre-tax earnings Income tax expense Net earnings $ 850,000 580,000 135,000 135,000 5,000 22,000 152,000 64,000 $ 88,000 Additional information 1. A building was acquired for cash during 2021. Also during 2021 equipment with a cost of $73,000 and accumulated depreciation of $15,000 was disposed of in exchange for cash. 2. A $10,000 common stock dividend was declared and issued in 2021. 3. Sales are 80% on credit, and 20% for cash. 4. Trade payables relate only to transactions with suppliers of merchandise inventory. 5. The bank loan matures in 2021 and was repaid in full, 6. The income tax rate is 42.1%. 7. Operating expenses include depreciation amounting to $65,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Finance Theory And Policy

Authors: Steven Michael Suranovic

1st Edition

193612646X, 9781936126460

More Books

Students also viewed these Finance questions