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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Selected information from Brook Corporation’s accounting records and financial statements for 2019 follows:

Chapter 21, Problem 6MC, Selected information from Brook Corporations accounting records and financial statements for 2019

On the statement of cash flows for the year ended December 31, 2019, Brook should disclose a net increase in cash in the amount of:

  1. a. $1,700,000
  2. b. $2,400,000
  3. c. $3,700,000
  4. d. $4,200,000

To determine

Provide B Company’s net increase in cash on the statement of cash flows for the year ended December 31, 2019.

Explanation

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities. Operating activities include cash inflows and outflows from business operations. Investing activities include cash inflows and cash outflows from purchase and sale of land or equipment, or investments. Financing activities include cash inflows and outflows from issuance of common stock and debt, payment of debt and dividends.

Justification for the correct answer:

Provide the B Company’s net increase in cash on the statement of cash flows is as below:

B Company
Statement of cash flows for the year ended December 31, 2019...

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