Reference no: EM132790641
Questions -
Q1. The acquisition of building by issuing preferred stock isGroup of answer choices
(a) a noncash transaction that is not reported in the body of a statement of cash flows
(b) a cash transaction and would be reported in the body of a statement of cash flows
(c) only reported if the statement of cash flows is prepared using the direct method
(d) a noncash transaction reported as an investing activity in the body of a statement of cash flows
Q2. During 2015, Can't Spell Industries reported cash provided by operations of $21,050, cash used in investing of $16,900, and cash used in financing of $6,300. In addition, cash spent for fixed assets (capital expenditures) during the period was $11,222. Average current liabilities were $21,567 and average total liabilities were $63,998. $2,000 of dividends were paid. Based on this information, what was Can't Spell's free cash flow?
(a) ($19,748)
(b) $9,828
(c) $7,828
(d) $33,028
Q3. Overall the company's cash increased during the year. The company has positive cash flows from operating activities, but negative cash flows from investing and financing activities. How would you classify the company?
(a) They are a growing company needing a lot of cash for financing activites
(b) They are a stable company with operating cash to pay for investing and financing needs
(c) They should work on having a positive cash flow from investing activites
(d) There's a going concern assumption that they won't stay in business much longer
Q4. WB Champions had the following transactions during 2015:
Issued par value common stock for cash of $20,000
Recorded and paid salaries of $7,500
Acquired a building by issuing common stock of $38,000
Declared and paid a cash dividend of $2,000
Sold a long-term investment for cash of $3,500
Recorded cash sales of $24,500
Purchased inventory for cash of $13,600
Acquired an investment in Winning Co. stock for cash of $1,000
Declared a stock dividend of $7,000
Repaid a 4 year bonds of $4,000
What is the net cash provided by operating activities?
(a) $16,400
(b) $400
(c) $3,900
(d) $3,400