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Operating activities provided $24,215 of cash, investment activities used $5,000 and financing activities used $4,000. What is the net increase in cash and marketable securities?
A$33,215
B$19,215
C$15,215
D$24,215
Answer & Solution
Correct answer: C. $15,215
1. The statement ends with the net change during the period in cash and marketable securities.
2. That net change is the sum of the three groups, with cash used shown as a negative.
3. Operating activities provided $24,215.
4. Investment activities used $5,000, so subtract it: $24,215 minus $5,000 equals $19,215.
5. Financing activities used $4,000, so subtract that too: $19,215 minus $4,000 equals $15,215.
6. The net increase in cash and marketable securities is therefore $15,215.
7. Adding all three figures gives $33,215, which treats cash spent as cash received, and stopping at $19,215 forgets the financing outflow.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.6 The Statement of Cash Flows_
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