Question :
63.Anders Inc, reported that its bonds with a par value : 1169189
63.Anders Inc, reported that its bonds with a par value of $500,000 and a carrying value of $525,000 was retired for $545,000 resulting in a loss of $20,000. The amounts to be reported under the cash flows include:
A. $45,000 net decrease in cash used for financing activities.
B. $525,000 net decrease in cash used for investing activities.
C. $20,000 increase in cash from operating activities; $545,000 decrease in cash used for investing activities.
D. $20,000 increase in cash from operating activities; $545,000 decrease in cash used for financing activities.
$20,000 loss is not a cash outlay and is added back to operating activities; $545,000 cash is used to repurchase debt.
64.Cinders Inc, reported net income of $50,000 and loss on sale of plant assets of $15,000. The cash received from the sale of plant assets was $45,000. Cinders also issued additional shares of stock for $25,000 and paid dividends of $4,500. Calculate the increase or decrease in cash from investing activities.
A. ($15,000).
B. $60,000.
C. $45,000.
D. $40,500.
65.Windwhirl Company, reported net income of $150,000 and a $5,000 gain on the sale of equipment. The cash received from the sale of equipment was $22,000. Windwhirl issued additional shares of stock for $225,000, paid off a $200,000 bond issue recorded at par and paid out $40,000 in dividends during the year. Calculate the increase or decrease in cash from financing activities.
A. ($15,000).
B. $7,000.
C. $27,000.
D. $152,000.
66.An increase in accounts payable is
A. added to the net income when determining the net cash provided by operating activities.
B. subtracted from the net income when determining the net cash provided by operating activities.
C. added to the cash flows from investing activities.
D. not used to calculate the net cash provided by operating activities.
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.Generally, if a short-term investment is to be classified as a cash equivalent, it must fall due within
A. 12 months from the date it was acquired.
B. 6 months from the date it was acquired.
C. 3 months from the date it was acquired.
D. 1 month from the date it was acquired.
69.On a statement of cash flows, an increase in a prepaid expense
A. is included in computing cash flows from operating activities.
B. is included in computing cash flows from investing activities.
C. is included in computing cash flows from financing activities.
D. is not used in computing cash flows.
70.When the net cash provided by operating activities is determined, an increase in income taxes payable should
A. be subtracted from the net cash amount after other calculations have been made.
B. be subtracted from the net income.
C. not be used in the calculation.
D. be added to the net income.
71.The payment of interest is considered to be
A. an outflow of cash that results from a financing activity.
B. an outflow of cash that results from an investing activity.
C. an outflow of cash that results from an operating activity.
D. an activity that is not reported on the statement of cash flows.
72.When the net cash provided by operating activities is determined, the amortization of bond premium
A. should be added to the net income.
B. should be subtracted from the net income.
C. should not be used in the calculation.
D. be subtracted from the net cash amount after other calculations have been made.
