Financial Reporting And Analysis MCQ - Financial Reporting And Analysis Section 2
Cash dividend paid = net income – increased in retained earnings
= 5 – 4 = 1.
13
The following information is available for Frampton Corporation Ltd.
| Cash received from customers | $12,000 |
| Cash paid to employees | $2,000 |
| Cash paid for income tax | $1,500 |
| Cash paid for purchase of equipment | $20,000 |
| Cash paid for dividends | $1,800 |
| Cash paid to retire long term debt | $15,000 |
The net cash from financing activities is closest to:
Cash paid for dividends + cash paid to retire long term debt, 1800+15000 =
16800$.
14
The following information is available for HTC Corporation.
| Income Statement Extract  | 2012 | 2011 |
| Operating income | $14 million | $12 million |
| Depreciation | $5 million | $3 million |
| Net income | $9 million | $7 million |
| Balance Sheet Extract  | 2012 | 2011 |
| Current Assets | $8 million | $6 million |
| Current Liabilities | $10 million | $12 million |
The total adjustment in order to compute operating cash flow is closest to:
| Add depreciation | $5 million |
| Subtract increase in current assets | ($2 million) |
| Subtract decrease in current liabilities | ($2 million) |
| Total adjustment | $1 million |
In step 2, all noncash items should be removed (not added) from
aggregated revenues and expenses.
