During the year, the Abbot Company had the following changes in account balances: 1) The Accumulated Depreciation account had a beginning balance of $25,000 and an ending balance of $35,000. The increase was due to depreciation expense.
2) The long-term Notes Payable account had a beginning balance of $40,000 and an ending balance of $15,000. The decrease was due to repayment of debt.
3) The Accounts Receivable account had a beginning balance of $60,000 and an ending balance of $50,000.
4) The Equipment account had a beginning balance of $25,000 and an ending balance of $92,500. The increase was due to the purchase of equipment for cash.
5) The Long-Term Investments account (marketable securities) had a beginning balance of $18,000 and an ending balance of $12,500. The decrease was due to the sale of investments at cost.
6) The amount of cash dividends declared and paid during the year was $22,000.
7) The Interest Payable account had a beginning balance of $2,250 and an ending balance of $1,250.
Assume that a statement of cash flows has been prepared. The combination of the three major components (operating activities, investing activities, financing activities) equals the:
A. Ending cash balance.
B. Net income for the period.
C. Change in the cash account balance between the beginning and end of the period.
D. Amount of cash inflow for the period.
Answer: C
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