Packard Company Engaged in the Following Transactions During Year 1

question 130

Multiple Choice

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $1,450 cash from the issue of common stock.2) Borrowed $920 from a bank.3) Earned $1,150 of revenues.4) Paid expenses of $350.5) Paid a $150 dividend.
During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.)
1) Issued an additional $825 of common stock.2) Repaid $570 of its debt to the bank.3) Earned revenues of $1,250.4) Incurred expenses of $560.5) Paid dividends of $200.
What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1?

• A)$800
• B)$1,570
• C)$1,150
• D)$650

Comprehend how dividends impact taxable income and understand the principles behind working capital components.

Make informed decisions on investment strategies based on tax considerations.

Understand the relationship between sales, EBIT, net income, dividends, and equity changes.

Understand the elements of financial statements and their significance.

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Definitions:

Contextual Forces

Environmental, social, or cultural factors that influence the setting or situation in which individuals or organizations operate.

Business Communication

The sharing of information between people within an organization and with those outside it, encompassing various modes and purposes.

Communication Opportunities

Situations or platforms that allow for the exchange of information between individuals or groups.

Diversity

The inclusion of individuals from various backgrounds, cultures, and perspectives.