Question

Net cash provided by operating activities was $12,000. Net cash provided by investing activities was $2,000. Net cash used in financing activities was $7,000. The cash balance at the beginning of the year was $4,000. The cash balance at the end of the year is:

Answer 1

$11,000

Step-by-step explanation:

The cash generated from operating activities is $12,000 which is a cash inflow, likewise net cash generated by investing activities was $2,000 which is also a cash inflow and cash used in financing is cash outflow so:

Cash generated during the year = Cash inflow - Cash Outflow

Cash generated during the year = ($12,000+2,000) - 7,000 = $7,000

Now

Cash balance at the end of the year = Opening cash balance + Cash generated during the year

So by putting values, we have:

Cash balance at the end of the year = $4,000 + $7,000 = $11,000