Table 4.1
Ruff Sandpaper Co.
Balance Sheets
For the Years Ended 2009 and 2010
-For the year ended December 31, 2008, a corporation had cash flow from operating activities of $20,000, cash flow from investment activities of -$15,000, and cash flow from financing activities of -$10,000. The Statement of Cash Flows would show a
A) net increase of $5,000 in cash and marketable securities.
B) net decrease of $5,000 in cash and marketable securities.
C) net decrease of $15,000 in cash and marketable securities.
D) net increase of $25,000 in cash and marketable securities.

Question

Table 4.1
Ruff Sandpaper Co.
Balance Sheets
For the Years Ended 2009 and 2010 
-For the year ended December 31, 2008, a corporation had cash flow from operating activities of $20,000, cash flow from investment activities of -$15,000, and cash flow from financing activities of -$10,000. The Statement of Cash Flows would show a
A) net increase of $5,000 in cash and marketable securities. 
B) net decrease of $5,000 in cash and marketable securities. 
C) net decrease of $15,000 in cash and marketable securities. 
D) net increase of $25,000 in cash and marketable securities.

Quizplus · Accepted Answer

The net cash flow is calculated by adding cash flow from operating, investing, and financing activities. In this case, the total net cash flow is $20,000 - $15,000 - $10,000 = -$5,000. This represents a net decrease in cash and marketable securities of $5,000. Therefore, the correct answer is B.

Table 4.1 Ruff Sandpaper Co