Question

On the basis of this information, which of the following statements is CORRECT? a. Prestopino's cash on the balance sheet at the end of the current year must be lower than the cash it had on the balance sheet at the previous year. b. Prestopino had negative net income in the current year. c. Prestopino had positive net income in the current year, but its income was less than its previous year's income. d. Prestopino's cash flow provided by operations in the current year must be higher than in the previous year. e. Prestopino's depreciation expense in the current year was less than $150,000.

Answer 1

b. Prestopino had negative net income in the current year

Step-by-step explanation:

Retained earnings at the end of previous year were $700,000, but retained earnings at the end of current year had declined to $320,000.

• The company does not pay dividends.

• The company's depreciation expense is its only non-cash expense; it has no amortization charges.

• The company has no non-cash revenues.

• The company's net cash flow (NCF) for current year was $150,000.

On the basis of this information, which of the following statements is CORRECT? Prestopino had negative net income in the current year

Prestopino DECPRECIATION expense in the current year was less than $150,000 and Prestopino had postive net income in the currnet year however, this income was less than it was in the previous year income.

Prestopino NCF in the current year must be higher than its NCF in the previous year and it cash on the balance at the end of the year must be lower than the cash it had on the balance sheet at the end of previous year