Zoum Corporation Had the Following Transactions During 2017

question 78

Multiple Choice

Zoum Corporation had the following transactions during 2017:
1. Issued $250,000 of par value common stock for cash.
2. Recorded and paid wages expense of $120,000.
3. Acquired land by issuing common stock of par value $100,000.
4. Declared and paid a cash dividend of $20,000.
5. Sold a long-term investment (cost $6,000) for cash of $6,000.
6. Recorded cash sales of $800,000.
7. Bought inventory for cash of $320,000.
8. Acquired an investment in Zynga stock for cash of $42,000.
9. Converted bonds payable to common stock in the amount of $1,000,000.
10. Repaid a 6-year note payable in the amount of $440,000.

What is the net cash provided by operating activities?

• A)$610,000.
• B)$580,000.
• C)$480,000.
• D)$360,000.

Differentiate between direct and indirect planning assumptions.

Understand key financial ratios and their significance in financial planning.

Realize the role of cash budgeting in financial management.

Apply theoretical knowledge in practical financial planning exercises.

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Definitions:

Accounts Receivable Balance

The total amount of money owed to a company by its customers for goods or services provided on credit.

Credit Sales

Sales made on credit, allowing the buyer to pay at a later date.

Days' Sales Outstanding

A financial metric that shows the average number of days it takes a company to collect payments after a sale has been made.

Exercise Value

Equal to the current price of the stock (underlying the option) less the strike price of the option.