Question

QUESTION 11

Reiser Co. has 8,000 shares of no-par common stock with a $50 stated value and 3,000 shares of $40 par, 5 percent noncumulative preferred stock outstanding. if the company declares a cash dividend of $22,000, the amount of the dividend paid to preferred stockholders is:

$5,000 $6,000 $11,00 $5,500

QUESTION 12

Which of the following would be reported as cash flow from financing activities

Cash receipts from the sale of equipment Cash receipts from interest on notes receivable Cash receipts from the issuance of long-term debt Cash receipts from dividends on long-term investments

QUESTION 13

Which of the following would be classified as an investing activity on a statement of cash flows

Cash recevied from dividends Cash paid for interest Cash received from the sale of land Cash used to repay principal amounts borrowed

QUESTION 14

Chen Corporation use the direct method of preparing a statement of cash flows.   Based on the following cash flows during 2012, what is the net inflow (outflow) from investing activities:

Cash receipts from issuance of stock 20,000 Cash received from customers 10,000 Dividends received on long term investments 5,000 Cash paid for wages 6,000 Cash paid for insurance 500 Cash paid for dividends 3,000 Cash paid to purchase building 30,000 Loan made to another company 10,000 ($10,000) ($30,000) ($40,000) ($43,000)

QUESTION 15

Based on the following information and using the direct method of preparing a statement of cash flows, what would be the net cash inflow (outflow) from financing activities?

Cash receipts from issuance of stock 20,000 Cash received from customers 10,000 Dividends received on long term investments 5,000 Cash paid for wages 6,000 Cash paid for insurance 500 Cash paid for dividends 3,000 Cash paid to purchase builidng 30,000 Loan made to another company 10,000 $20,000 $17,000 ($3,000) ($13,000)

Answer 1

11) Dividend paid to preferred shareholders = 3000*40*5% = 6000

So answer is b) $6000

12) Which of the following would be reported as cash flow from financing activities

Financing activities includes issue of stock and bonds, dividend paid and repaid bond and purchase of stock

So answer is c) Cash receipts from the issuance of long-term debt

13) Which of the following would be classified as an investing activity on a statement of cash flows

Investing activities includes purchase or sale of long term assets or investment

So answer is c) Cash received from the sale of land

14) Calculate following

Cash flow from investing activities
Cash paid to purchase building	-30000
Loan made to other company	-10000
Net cash used investing activities	-40000

So answer is c) ($40000)

15) Calculate following

Cash flow from financing activities
Cash receipts from issuance of stock	20000
Dividend paid	-3000
Net cash flow from financing activities	17000

So answer is b) $17000