Santa Fe Company Was Started on January 1, Year 1

question 22

Multiple Choice

Santa Fe Company was started on January 1, Year 1, when it acquired $9,100 cash by issuing common stock. During Year 1, the company earned cash revenues of $5,150, paid cash expenses of $3,300, and paid a cash dividend of $850. Based on this information, which of the following statements is true?

• A) The Year 1 statement of cash flows would show a net cash flow from financing activities of $8,250.
• B) The balance sheet at December 31, Year 1 would show total stockholders' equity of $14,250.
• C) The Year 1 income statement would show net income of $1,000.
• D) The Year 1 statement of cash flows would show net cash inflow from operating activities of $9,100.

---

Definitions:

Positive Externalities

Benefits that are enjoyed by a third-party or the society at large, as a result of an economic transaction.

Socially Optimal Level

The socially optimal level is the quantity of production or consumption where the marginal social cost equals the marginal social benefit, maximizing overall welfare.

Policymakers

Individuals or groups responsible for making decisions and establishing regulations that guide the economic, social, and political governance of a society.

Marginal Benefit

The plus in satisfaction or usefulness someone gets by consuming an extra unit of a given product or service.