Selected Data for Kris Corporation's Comparative Balance Sheets for Year

question 82

Multiple Choice

Selected data for Kris Corporation's comparative balance sheets for Year 1 and Year 2 are as follows:
$\begin{array}{lrr}\text { Assets } & \text { Year 1 } & \text { Year 2 }\\\hline \text { Cash } & \$ 100,000 & (\$ 50,000) \\\text { Accounts receivable (net) } & 50,000 & 100,000 \\\text { Inventory } & 100,000 & 250,000 \\\text { Equipment (net) } & \$ 300,000 & \underline{350,000} \\{\text { Total assets }} & \$ 550,000 & \$ 650,000\\\\\text { Liabilities and Equity }\\\text { Accounts payable } & \$ 150,000 & \$ 100,000 \\\text { Income taxes payable } & 80,000 & 30,000 \\\text { Bonds payable } & 100,000 & 80,000 \\\text { Common stock } & 100,000 & 200,000 \\\text { Retained earnings } & 120,000 & 240,000 \\\quad \text { Total liabilities and Equity } & \$ 550,000 & \$ 650,000\\\\\text { A brief income statement for Year } 2 \text { shows the }\\\text { following: }\\\text { Sales }&&\$900,000\\\text { Cost of goods sold } & \$ 500,000 \\\text { Operating expenses } & 100,000 \\\text { Depreciation } & 50,000 \\\text { Income tax expense } & 100,000&750,000 \\\text { Net Income }&&\$150,000\end{array}$
-What are Kris' cash flows from financing activities for Year 2?

• A)$0
• B)$50,000 inflow
• C)$50,000 outflow
• D)$150,000 outflow

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Definitions:

Direct Labor-Hours

The total hours of labor directly involved in producing goods or services, which is often used as a base for allocating overhead costs.

Variable Manufacturing Overhead

Costs that vary with the level of manufacturing activity, including items like indirect materials and utilities.

Fixed Manufacturing Overhead

These are the manufacturing costs that do not vary with the volume of production, including costs like rent, insurance, and salaries for certain employees.

Machine-Hours

The total hours that machinery is operational and in use on the production floor.