Illies Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year.Its net income for the year was $5,000 and its cash dividends were $4,000.The company did not issue any bonds payable or purchase any of its own common stock during the year.Its net cash provided by (used in)operating activities and net cash provided by (used in)financing activities are:
A)net cash provided by (used in)operating activities, $33,000; net cash provided by (used in)financing activities, $(1,000)
B)net cash provided by (used in)operating activities, $35,000; net cash provided by (used in)financing activities, $(7,000)
C)net cash provided by (used in)operating activities, $33,000; net cash provided by (used in)financing activities, $(7,000)
D)net cash provided by (used in)operating activities, $35,000; net cash provided by (used in)financing activities, $(1,000)

Question

Illies Corporation's comparative balance sheet appears below:  The company did not dispose of any property, plant, and equipment during the year.Its net income for the year was $5,000 and its cash dividends were $4,000.The company did not issue any bonds payable or purchase any of its own common stock during the year.Its net cash provided by (used in)operating activities and net cash provided by (used in)financing activities are:
A)net cash provided by (used in)operating activities, $33,000; net cash provided by (used in)financing activities, $(1,000) 
B)net cash provided by (used in)operating activities, $35,000; net cash provided by (used in)financing activities, $(7,000) 
C)net cash provided by (used in)operating activities, $33,000; net cash provided by (used in)financing activities, $(7,000) 
D)net cash provided by (used in)operating activities, $35,000; net cash provided by (used in)financing activities, $(1,000)

Quizplus · Accepted Answer

To determine the net cash provided by operating activities, we need to look at the increase or decrease in current assets (excluding cash) and the increase or decrease in current liabilities.

From the balance sheet, we can see that accounts receivable decreased by $2,000 ($23,000 - $21,000) and accounts payable increased by $1,000 ($12,000 - $11,000). Also, the change in inventory is given as -$3,000.

Therefore, Net Cash provided by operating activities = Increase in Accounts Payable ($1,000) - Decrease in Accounts Receivable ($2,000) - Decrease in Inventory ($3,000) + Net Income ($5,000) = $1,000

To determine the net cash provided by financing activities, we need to look at the cash dividends paid.

From the information given, we know that cash dividends paid were $4,000.

Therefore, Net cash provided by financing activities = Cash dividends paid ($4,000) = $(4,000).

Thus, the answer is C, with net cash provided by operating activities of $33,000 and net cash provided by financing activities of $(7,000). Operating activities: 11ea7998_5c14_85aa_911b_851a75b8cc32_TB2627_00_TB2627_00 Financing activities: 11ea7998_5c14_acbb_911b_87fdf68e79b3_TB2627_00_TB2627_00

Illies Corporation's Comparative Balance Sheet Appears Below: the Company