Question

c an increase of $$1,000 from investing activities d an increase of $46,000 from investing activities and an addition to net income of $5,000 26. Cash paid for equipment would be reported in the statement of cash flows in a the cash flows from operating activities section b. the cash flows from financing activities section c. the cash flows from investing activities section d a separate schedule 27. Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows? a issuance of bonds payable b. issuance of capital stock purchase of treasury stock d. purchase of noncurrent assets 28. On the statement of cash flows, the cash flows from financing activities section would include all of the following except a. receipts from the sale of bonds payable b. payments for dividends c. payments for purchase of treasury stock d. payments of interest on bonds payable 29. Cash dividends paid on capital stock would be reported in the statement of cash flows in a. the cash flows from financing activities section b. the cash flows from investing activities section c. a separate schedule d. the cash flows from operating activities section 30. Land costing $88,000 was sold for $50,000 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? a $50,000 b. $88,000 c. $138,000 d. $38,000 31. The current period statement of cash flows includes the flowing: Cash balance at the beginning of the period Cash provided by operating activities Cash used in investing activities Cash used in financing activities $310,000 185,000 43,000 97.000 32. The cash balance at the end of the period is a. $45,000 b. $635,000 c. $355,000 d. $125,000 Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? a. a decrease in inventory b. a decrease in accounts payable c. preferred dividends declared and paid d. a decrease in accounts receivable

Answer 1

Ans. 26	Option C
	*Sale or purchase transaction of property, plant and equipment are listed in the Investing activities section
	of cash flow statement.
Ans. 27	Option D
	*Purchase of non current (fixed) assets are the investing activties.
	Others (a,b and c) are the transaction of financing activities.
Ans. 28	Option D
	*Payment of interest on bonds payable is an operating activity.
Ans. 29	Option A
	*Issue and redemption of shares and debentures and dividends paid are the financing activities.
Ans. 30	Option A   $50,000
	*Sales value of assets is reported in the investing activities section and the loss on sale of asset
	is reported in the operating activities section of cash flow statement.
Ans. 31	Option C   $355,000
	Particulars		Amount
	Cash provided by Operating activities (a)		$185,000
	Cash used in Investing activities (b)		-$43,000
	Cash used in Financing activities (c)		-$97,000
	Net increase in Cash (a + b + c)		$45,000
	Add: Cash at beginning of period		$310,000
	Cash at ending of period		$355,000
Ans. 32	Option B
	*Decrease in current liabilities and Increase in current assets other than cash is deducted from Net Income.
	*Increase in current liabilities and Decrease in current assets other than cash is added to Net Income.
	*Non cash & Non operating expenses are added to Net income.