Santa Fe Company Was Started on January 1, Year 1

question 113

Multiple Choice

Santa Fe Company was started on January 1, Year 1, when it acquired $9,400 cash by issuing common stock. During Year 1, the company earned cash revenues of $5,600, paid cash expenses of $3,450, and paid a cash dividend of $1,000. Which of the following is true based on this information?

• A)The Year 1 statement of cash flows would show net cash inflow from operating activities of $5,600.
• B)The December 31, Year 1 balance sheet would show total equity of $8,400.
• C)The Year 1 income statement would show net income of $1,150.
• D)The Year 1 statement of cash flows would show a net cash inflow from financing activities of $8,400.

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Definitions:

Altruistic Behavior

Selfless actions performed for the benefit of others, without expectation of personal gain.

Self-Interest

The concern for one's own advantage and well-being, with behavior guided primarily by personal benefits.

Psychological Egoist

A theory or belief that posits individuals are inherently driven by self-interest, and all actions, even those appearing altruistic, are ultimately motivated by personal gain.

Motivated

Having a strong willingness or drive to do something.