Question :
56. Cannon Manufacturing Co. sold equipment that cost $18,000 for $6,000. : 1197723
56. Cannon Manufacturing Co. sold equipment that cost $18,000 for $6,000. A loss on sale of $1,000 was recorded. How is the Cash Flows from Investing Activities affected?
A. A cash inflow of $5,000 is recorded.
B. A cash inflow of $6,000 is recorded.
C. A cash inflow of $11,000 is recorded.
D. A cash inflow of $12,000 is recorded.
57. The Natural Company’s balance sheet would report the balance of Cash on December 31, 2013
A. $311,000.
B. $410,000.
C. $426,000.
D. $461,000.
58. Investing activities include
A. purchases of merchandise for cash.
B. purchases of plant and equipment for cash.
C. purchases of prepaid expense items such as supplies and insurance for cash.
D. increase in accounts receivable.
59. A corporation received $50,000 in cash when it sold a building and paid $90,000 in cash when it purchased some new machinery. As a result, the statement of cash flows would report
A. $40,000 as the net cash used in financing activities.
B. $40,000 as the net cash provided by investing activities.
C. $40,000 as the net cash used in investing activities.
D. $40,000 as the net cash provided by financing activities.
60. A corporation received $80,000 in cash when it sold a building and paid $50,000 in cash when it purchased some new machinery. As a result, the statement of cash flows would report
A. $30,000 as the net cash used in financing activities.
B. $30,000 as the net cash provided by investing activities.
C. $30,000 as the net cash used in investing activities.
D. $30,000 as the net cash provided by financing activities.
61. A corporation received $80,000 in cash when it sold common stock and used the proceeds to pay $60,000 in bonds payable. As a result, the statement of cash flows would report
A. $20,000 as the net cash used in financing activities.
B. $20,000 as the net cash provided by investing activities.
C. $20,000 as the net cash used in investing activities.
D. $20,000 as the net cash provided by financing activities.
62. An example of an investing activity is
A. the issue of preferred stock.
B. the resale of treasury stock.
C. the issue of bonds and notes payable.
D. the purchase of property, plant, or equipment for cash.
63. The Natural Company’s Statement of Cash Flows would report Cash Flows from Investing Activities totaling:
A. $50,000.
B. $84,000.
C. $(284,000).
D. $(250,000).
64. An example of a financing activity is
A. the sale of merchandise for cash.
B. the issue of stock for cash.
C. the sale of used equipment for cash.
D. the purchase of a building.
65. The purchase or resale of treasury stock is reported in which of the following categories?
A. Operating Activities
B. Investing Activities
C. Financing Activities
D. Disclosures
66. The retirement of bonds with cash by a company is reported under which of the following?
A. Operating Activities
B. Investing Activities
C. Financing Activities
D. Disclosures
67. The method used by most corporations to prepare the statement of cash flows is the
A. accrual method.
B. direct method.
C. deferral method.
D. indirect method.
68. Eleemosynary Organization acquired land valued at $56,000 for 4,200 shares of its stock. Where on the Statement of Cash flows does this transaction activity appear?
A. Operating Activities
B. Investing Activities
C. Financing Activities
D. Disclosures
69. Corporations do not commonly use the direct method for the Statement of Cash Flows because
A. they do not have easy access to the necessary information.
B. FASB prefers the indirect method.
C. the direct method does not follow GAAP.
D. there are fewer disclosures required under the indirect method.
70. The Natural Company’s Statement of Cash Flows would report Cash Flows from Financing Activities totaling:
A. $500,000.
B. $300,000.
C. $275,000.
D. $250,000.
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