Reference no: EM133054400
QUESTION 1 - Poof Co. had the following transaction: Purchase of land for cash, $90,000; sale of equipment for cash $30,000; issuance of bonds for cash, $100,000; payment of mortgage for cash, $15,000; issue stock dividends, $40,000; purchase treasury stock; $200,000; receive cash dividends, $15,000; scrapped a company car which had a book value of $5,000. What is the net effect of the investing activities?
Decrease $60,000
Decrease $140,000
Decrease $55,000
Increase $60,000
Increase $55,000
QUESTION 2 - Cleveland Inc. borrowed $50,000 cash from the bank in October 2020. In March 2021, Cleveland paid back the $50,000 plus $1,250 in interest. How will the October transaction be shown in the 2020 statement of cash flows?
An increase in cash in the financing activities section
A decrease in cash in the financing activities section
An increase in cash in the investing activities section
A decrease in cash in the investing activities section
Does not appear in the statement of cash flows
QUESTION 3 - Which of the following will cause an increase in cash in the financing activities section of the statement of cash flows?
Issuance of stock dividend
Issuance of treasury stock
Receipt of cash dividend
Stock split
Payment of interest on notes payable
QUESTION 4 - Issuance of stock dividends would appear in the statement of cash flows as:
An increase in cash in the investing activities section
A decrease in cash in the investing activities section
An increase in cash in the financing activities section
A decrease in cash in the financing activities section
Does not appear in the statement of cash flows
QUESTION 5 - Rodgers Company sold equipment with a book value of $14,000 for $17,000. How will this transaction appear in the operating activities section of the statement of cash flows?
A $3,000 decrease in cash
A $3,000 increase in cash
A $17,000 decrease in cash
A $17,000 increase in cash
This transaction is an investing activity and does not affect the operating activities.
QUESTION 6 - Sally had a parcel of land that Coaters. Inc. wanted. Coaters believed the land could house a distribution center that would give them a competitive advantage in the market. Sally contributed the land to Coaters in exchange for a 5% stock distribution. How would this transaction appear in the statement of cash flows?
Operating activity
Investing activity
Financing activity
Noncash investing and financing activity
QUESTION 7 - Harrison Co. bought an annual insurance policy in December 2020 which will be used in total in 2021. How will this transaction be shown on the statement of cash flows in 2021?
An increase in cash in the operating activities section
A decrease in cash in the operating activities section
An increase in cash in the investing activities section
A decrease in cash in the investing activities section
Does not appear in the statement of cash flows
QUESTION 8 - The payment of cash dividends would appear in the statement of cash flows as:
An increase in cash in the operating activities section
A decrease in cash in the operating activities section
An increase in cash in the investing activities section
A decrease in cash in the investing activities section
An increase in cash in the financing activities section
A decrease in cash in the financing activities section
QUESTION 9 - A business must show an increase in cash in which section in the long run to remain solvent?
Operating
Investing
Financing
Noncash investing and financing
QUESTION 10 - GrannyPants Co. had ending cash of $183,000. During the year, the company showed an increase in cash from operating activities of $72,000, a decrease in cash of $56,000 from investing activities, an increase in cash of $120,000 from financing activities, and $47,000 in the noncash investing and financing section. What is the beginning cash on the balance sheet for GrannyPants Co.?
$94,000
$47,000
$319,000
$136,000
QUESTION 11 - Employees of Richardson Co. worked the week ending December 31, but will not be paid until January. How will this transaction appear on the Richardson's January statement of cash flows?
An increase in cash in the operating activities section
A decrease in cash in the operating activities section
An increase in cash in the financing activities section
A decrease in cash in the financing activities section
Does not appear in the statement of cash flows
QUESTION 12 - Washington Co. bought land for $75,000 cash, sold equipment for $15,000 cash, bought a building for $150,000 with a mortgage, and purchased treasury stock for cash at a cost of $50,000. What is the net effect in the investing section on the statement of cash flows?
An increase of $60,000
A decrease of $260,000
A decrease of $110,000
A decrease of $60,000
None of these are correct