The Records of BCD Provided the Following Information for the Year

question 113

Essay

The records of BCD provided the following information for the year ended December 31, 2011:
(1) $\begin{array} { | l | r | r | } \hline \text { Balance sheet: } & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 0 } \\\hline \text { Cash } & \$ 18,000 & \$ 20,000 \\\hline \text { Accounts receivable (net) } & 26,000 & 22,000 \\\hline \text { Inventory } & 30,000 & 27,000 \\\hline \text { Capital assets (net) } & 75,000 & 76,000 \\\hline \text { Payable (short term) } &41,000 & 40,000 \\\text { Bonds payable }&50,000&60,000\\\hline \text { Common stock } &30,000&30,000 \\\hline\text { Retained earnings }&18,000&?\\\hline\end{array}$ (2) Cash dividends of $5,000 were declared in 2010 and paid in 2011, and cash dividends of $2,000 were declared and paid in 2011.
(3) Net loss in 2011, $1,000.
(4) Depreciation expense for 2011, $5,000.
Calculate the amount of net cash from operating activities during 2011.

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Definitions:

Time Value

Refers to the concept that money available at the present time is worth more than the identical sum in the future due to its potential earning capacity.

Option

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price within a certain period.

Exercise Value

The value of an option if it were exercised immediately, typically the difference between the underlying asset's market price and the option's strike price.

Time Value

The concept that money available in the present is worth more than the same amount in the future due to its potential earning capacity.