During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone, which of the following is not correct?

A) Net income amounted to $350.

B) Total assets increased by $200.

C) Cash inflow from operating activities was $350.

D) Cash inflow from operating activities was $200.

Question

Business

Lillianna Vang

27 February, 02:15

During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone, which of the following is not correct?

A) Net income amounted to $350.

B) Total assets increased by $200.

C) Cash inflow from operating activities was $350.

D) Cash inflow from operating activities was $200.

+1

Answers (1)

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Vaughan · Answer 1

B) Total assets increased by $200.

Explanation:

If during Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone:

Then it is correct that there was a net income of $350 before the payment of dividend which is gotten by 1,950 - 1,600. Cash from operating activities will also be the same amount of $350.

However it will not be correct to state that assets increased by $200 as there is no such indication.