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 operating activities and net cash used in financing activities are:
A)net cash provided by operating activities, $33,000; net cash used in financing activities,$1,000
B)net cash provided by operating activities, $35,000; net cash used in financing activities,$7,000
C)net cash provided by operating activities, $33,000; net cash used in financing activities,$7,000
D)net cash provided by operating activities, $35,000; net cash 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 operating activities and net cash used in financing activities are:
A)net cash provided by operating activities, $33,000; net cash used in financing activities,$1,000 
B)net cash provided by operating activities, $35,000; net cash used in financing activities,$7,000 
C)net cash provided by operating activities, $33,000; net cash used in financing activities,$7,000 
D)net cash provided by operating activities, $35,000; net cash used in financing activities,$1,000

Quizplus · Accepted Answer

To determine the net cash provided by operating activities, we need to start with net income of $5,000 and adjust for non-cash items (such as depreciation). However, the problem does not provide this information, so we cannot calculate the exact amount of net cash provided by operating activities. 
To determine the net cash used in financing activities, we need to look for any changes in long-term liabilities or equity accounts. However, the problem states that the company did not issue any bonds payable or purchase any of its own common stock during the year. This leaves us with only the cash dividends of $4,000 as a financing activity. 
Therefore, the answer is C as it is the only option with net cash provided by operating activities ($33,000) and net cash used in financing activities ($7,000).

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