The information below was taken from the 2018 annual report of Jena Corp.
$\begin{array}{|l|c|c|c|}
\hline& \mathbf{2 0 1 8} & \mathbf{2 0 1 7} & \mathbf{2 0 1 6} \
\hline \text { Beginning cash balance } & \$ 12,000 & ? & \$ 5,000 \
\hline \text { Net cash flow from operating activities } & 7,987 & ? & 9,100 \\hline \text { Net cash flow from investing activities } & 2,450 & 4,330 & ? \
\hline \text { Net cash flow from financing activities } & ? & (9,612) & (7,500) \
\hline \text { Ending cash balance } & \$ 11,000 & ? & \$ 12,500\
\hline
\end{array}$
Which of the following is the missing amount for the net cash flow from operating activities for 2017?
A)$8,110
B)$4,782
C)$8,475
D)$3,874

Question

The information below was taken from the 2018 annual report of Jena Corp.
$\begin{array}{|l|c|c|c|} 
\hline& \mathbf{2 0 1 8} & \mathbf{2 0 1 7} & \mathbf{2 0 1 6} \
\hline \text { Beginning cash balance } & \$ 12,000 & ? & \$ 5,000 \
\hline \text { Net cash flow from operating activities } & 7,987 & ? & 9,100 \\hline \text { Net cash flow from investing activities } & 2,450 & 4,330 & ? \
\hline \text { Net cash flow from financing activities } & ? & (9,612) & (7,500) \
\hline \text { Ending cash balance } & \$ 11,000 & ? & \$ 12,500\
\hline
\end{array}$
Which of the following is the missing amount for the net cash flow from operating activities for 2017?
A)$8,110
B)$4,782
C)$8,475
D)$3,874

Quizplus · Accepted Answer

To find the missing amount for the net cash flow from operating activities for 2017, we can use the information provided for the beginning and ending cash balances along with the net cash flows from investing and financing activities for 2017. The formula to calculate the ending cash balance is:$$ \text{Ending Cash Balance} = \text{Beginning Cash Balance} + \text{Net Cash Flow from Operating Activities} + \text{Net Cash Flow from Investing Activities} + \text{Net Cash Flow from Financing Activities} $$For 2017, the beginning cash balance is $12,000 (from the end of 2016), and the ending cash balance is $12,500. The net cash flow from investing activities is $4,330, and the net cash flow from financing activities is $(9,612).Rearranging the formula to solve for the net cash flow from operating activities gives:$$ \text{Net Cash Flow from Operating Activities} = \text{Ending Cash Balance} - \text{Beginning Cash Balance} - \text{Net Cash Flow from Investing Activities} - \text{Net Cash Flow from Financing Activities} $$$$ \text{Net Cash Flow from Operating Activities} = \$12,500 - \$12,000 - \$4,330 - (-\$9,612) $$$$ \text{Net Cash Flow from Operating Activities} = \$500 - \$4,330 + \$9,612 $$$$ \text{Net Cash Flow from Operating Activities} = \$5,782 $$However, since none of the options match $5,782, it seems there was a mistake in my calculation. Let's correct that:Given that the ending cash balance for 2017 is not directly provided, we should look at the transition from 2017 to 2018. The beginning cash balance for 2018 is the ending cash balance for 2017, which is $12,000. $$ \text{Net Cash Flow from Operating Activities} = \$11,000 - \$12,000 - \$2,450 - (-\$9,612) $$$$ \text{Net Cash Flow from Operating Activities} = -\$1,000 - \$2,450 + \$9,612 $$$$ \text{Net Cash Flow from Operating Activities} = \$6,162 $$This calculation was based on the incorrect assumption that the ending balance for 2017 was the beginning balance for 2018, which is correct, but the calculation was mistakenly applied to the wrong year's data. The correct approach to find the missing 2017 operating cash flow involves understanding the relationship between the beginning and ending balances and the cash flows, but without the exact ending balance for 2017 provided, direct calculation from the given data is not possible. My explanation incorrectly calculated the value based on the changes from 2017 to 2018, not accounting correctly for the missing data. Given the mistake in the calculation process and the misunderstanding of the provided data, the correct answer should be deduced from the information given for 2017 specifically, which was not directly calculable from the provided steps. The mistake was in the calculation process and the misinterpretation of the data provided.

The Information Below Was Taken from the 2018 Annual Report