During the Year,the Abbot Company Had the Following Changes in Account

question 68

Multiple Choice

During the year,the Abbot Company had the following changes in account balances:
1) The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000.The increase was due to depreciation expense.
2) The long-term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000.The decrease was due to repayment of debt.
3) The Accounts Receivable account had a beginning balance of $60,000 and an ending balance of $50,000.
4) The Equipment account had a beginning balance of $25,000 and an ending balance of $92,500.The increase was due to the purchase of equipment for cash.
5) The Long-Term Investments account (marketable securities) had a beginning balance of $18,000 and an ending balance of $12,500.The decrease was due to the sale of investments at cost.
6) The amount of cash dividends declared and paid during the year was $22,000.
7) The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250.
Assume that a statement of cash flows has been prepared.The combination of the three major components (operating activities,investing activities,financing activities) equals the:

• A)Net income for the period.
• B)Change in the cash account balance between the beginning and end of the period.
• C)Ending cash balance.
• D)Amount of cash inflow for the period.