Reference: 14-01 Financial Statements for Larned Company Appear Below: Larned
Question 11
Question 11
Multiple Choice
Reference: 14-01 Financial statements for Larned Company appear below: Larned Company Balance Sheet December 31, 20X6 and 20X5 (dollars in thousands) Current assets: Cash and marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Noncurrent assets: Plant & equipment, net Total assets Current liabilities: Accounts payable Accrued liabilities Total current liabilities Stockholders’ equity: Preferred stock, $20 par, 10% Common stock, $10 par Retained earnings Total stockholders’ equity Total liabilities & stockholders’ equity 20X6$130150100204001,640$2,040$2901104001206608601,640$2,04020X5$100130100203501,600$1,950$280803601206907801,590$1,950 Larned Company Income Statement For the Year Ended December 31, 20X6 (dollars in thousands) Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income $2,9302,050880350530 Net operating income Interest expense Net income before taxes Income taxes (30%) Net income 53040490147$343 Dividends during 20X6 totalled $263 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, 20X6 was $160. Included in operating expenses was depreciation expense of $20,000. No non-current assets were sold. -Long-term debt on the balance sheet increased by $100,000 and dividends payabl? increased by $50,000. What will be the net result in cash flow?
A) Cash increased by $50,000. B) Cash decreased by $150,000. C) Cash decreased by $50,000. D) Cash increased by $100,000.
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