A to Z Corporation engaged in the following transaction \"Purchased a building f

Question

A to Z Corporation engaged in the following transaction "Purchased a building for $80,000 cash." On the Statement of Cash Flows, the transaction would be classified as __________.
a. Cash Flows from Operating Activities.
b. Cash Flows from Investing Activities.
c. Cash Flows from Financing Activities


B. Bonds Company The following is a single-step income statement for the B. Bonds Company: B. Bonds Company Income Statement
For the Year Ended December 31, 2004
Revenues
Net Sales $200,000
Interest Income 17,500
Total Revenues $217,500
Expenses
Cost of Goods Sold $50,000
Selling Expenses 20,000
General and Administrative Expenses 27,500
Interest Expense 12,500
Income Tax Expense 39,000
Total Expenses 149,000
Net Income $68,500
Refer to B. Bonds Company. If the income statement were prepared in a multiple-step format, income from operations would be __________.
a. $ 77,500
b. $ 80,000
c. $ 102,500
d. $ 97,500

Eagle Eye, Inc. a corporation received an additional investment of $5,000 cash in exchange for shares of capital stock. How does this transaction affect Eagle Eye's accounts?
a. Increase in stock expense and decrease cash by $5,000 each
b. Increase capital stock and increase cash by $5,000 each
c. Increase capital stock and increase revenue by $5,000 each.
d. No effect at this time


If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer, the terms are:
a. consigned
b. n/30
c. FOB shipping point
d. FOB destination

Explanation / Answer

b. Cash Flows from Investing Activities. b. $ 80,000 c. Increase capital stock and increase revenue by $5,000 each. c. FOB shipping point

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