Spirit Company, a Merchandiser, Recently Completed Its 2010 Calendar Year

Multiple Choice

Spirit Company, a merchandiser, recently completed its 2010 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow:

Additional Information on Year 2010 Transactions

What is the net cash flows provided (used) by financing activities?

A) ($118,100)
B) $118,100
C) $54,100
D) ($54,100)
E) $2,500