Use the Following for Questions

question 27

Multiple Choice

Use the following for questions
Sanchez Company engaged in the following transactions during 2015:
1) Started the business by issuing $42,000 of common stock for cash.
2) The company paid cash to purchase $26,400 of inventory.
3) The company sold inventory that cost $16,000 for $30,600 cash.
4) Operating expenses incurred and paid during the year,$14,000.
Sanchez Company engaged in the following transactions during 2016:
1) The company paid cash to purchase $35,200 of inventory.
2) The company sold inventory that cost $32,800 for $57,000 cash.
3) Operating expenses incurred and paid during the year,$18,000.
Note: Sanchez uses the perpetual inventory system.
-The balance in the inventory account shown at December 31,2016 is:

• A)$2,400.
• B)$12,800.
• C)$61,600.
• D)$28,800.

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Definitions:

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, debt, and paying dividends.

Cash Flows

The collective sum of cash flowing in and out of a company, which influences its liquidity.

Investing Sections

Refers to the part of the cash flow statement that shows the flow of cash related to investments in assets, securities, and other non-operational activities.

Financing Sections

Parts of financial statements or reports that detail funding activities like equity, debt issuance, and repayment of debt, providing insights into how a company finances its operations.