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Net cash from operating activities is $46,000, from investing $28,000, and from financing ($36,000). Beginning cash was $12,000. What is the ending cash balance?
A$50,000
B$38,000
C$26,000
D$74,000
Answer & Solution
Correct answer: A. $50,000
1. Net change in cash = $46,000 + $28,000 − $36,000 = $38,000 increase.
2. Ending cash = beginning cash + change = $12,000 + $38,000.
3. = $50,000.
4. Trap: $38,000 (option B) is the increase in cash, not the ending balance.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §7.2.3 "Steps in preparing the statement", p.277_
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