a.

Cash paid by customers       Sale of operational assets      Issuance of bonds payable

b.

Dividends received              Cash paid by customers        Issuance of bonds payable

c.

Sale of operational assets     Dividends received              Cash paid by customers

d.

Issuance of bonds payable    Sale of operational assets     Dividends received

a.

Sale of an investment for cash

b.

Purchase of a machine for cash

c.

Issuance of common stock in exchange for land

d.

Declaration and payment of a cash dividend on common stock

a.

Interest received

b.

Interest paid

c.

Dividends received

d.

Dividends paid

a.

inflow and outflow of cash.

b.

outflow of cash.

c.

addition to net income in the adjustments to reconcile net income to cash from operating activities.

d.

deduction from net income in the adjustments to reconcile net income to cash from operating activities.

a.

proceeds from sale of operating assets.

b.

proceeds from sale of investments accounted for by the equity method.

c.

interest collect on notes receivable.

d.

proceeds from sale of securities available for sale.

a.

Cash from issuance of Carlton Co. common stock

b.

Cash from issuance of Carlton Co. preferred stock

c.

Cash from issuance of Carlton Co. bonds payable

d.

Cash from sale of Fern Company common stock

 Balance Sheet

     December 31,

2011

2010

Cash

 $       31,000

 $    15,000

Accounts receivable

  28,500

  30,000

Allowance for doubtful accounts

    (2,000)

  (1,500)

Inventory 

    15,000

  10,000

Prepaid insurance

     1,400

   2,400

Property, plant, and equipment

     81,000

  80,000

Accumulated depreciation

    (16,000)

 (20,000)

Land

          81,100

      40,100

Total assets

 $      220,000

 $  156,000

Accounts payable

 $        11,000

 $    10,000

Wages payable

   1,000

     2,000

Interest payable

      1,000

         -  

Notes payable, long-term

   46,000

   20,000

Common stock, nopar

     136,000

 100,000

Retained earnings

           25,000

      24,000

Total liabilities and

stockholders' equity

 $       220,000

 $  156,000

Income Statement

Sales revenue

 $         80,000

 Cost of goods sold

      (35,000)

Depreciation expense

       (5,000)

Bad debt expense

       (1,000)

Insurance expense

     (1,000)

Interest expense

       (2,000)

Salaries and wages expense

       (12,000)

Income tax expense

        (3,000)

Remaining expenses

  (13,000)

Loss on sale of operational assets

            (2,000)

Net income

 $          6,000

1.

Wrote off $500 accounts receivable as uncollectible.

2.

Sold an operational asset for $4,000 cash (cost, $15,000, accumulated depreciation, $9,000).

3.

Issued common stock for $5,000 cash.

4.

Declared and paid a cash dividend of $5,000.

5.

Purchased land for $20,000 cash.

6.

Acquired land for $21,000, and issued common stock as payment in full.

7.

Acquired operational assets, cost $16,000; issued a $16,000, three-year, interest-bearing note payable.

8.

Paid a $10,000 long-term note installment by issuing common stock to the creditor.

9.

Borrowed cash on a long-term note, $20,000.