7. The declaration and payment of a stock dividend would be reported in which se
ID: 2438755 • Letter: 7
Question
7. The declaration and payment of a stock dividend would be reported in which section of the Statement of Cash Flows a. b. c. d. c. Operating Activity Investing Activity Financing Activity Cannot determine based on this information None of the above 8. Under the indirect method, cach of the following is added to net income in computing net cash provided by operating activities except depreciation expense a loss on the sale of equipment a gain on sale of land the decrease in accounts receivable during the year All of the above are added a. b. c. d. e. 9. Flynn Co. reported sales of $250,000. If accounts receivable decreased $10,000 during the ycar: a. Sales is greater than cash collected b. Cash collected is greater than sales c. Cash collect is the same as sales d. None of the above 10. Refer to the previous question. The amount of cash collected is: 11. Use the following to determine the cash flows provided by or used in investing activities . Net income is $145,000, including a gain on the sale of equipment of $5,000 .The equipment cost S23,000, had a book value of $12,000 at the time of sale, and was sold for $17,000. The company purchased land for $25,000 a. b. c. d. c. net cash provided, S170,000 net cash used, S8,000 net cash used, S25,000 net cash provided, $25,000 net cash provided, S23,000Explanation / Answer
7.
The decleration and payment of stock dividend is a cash outflow from financing activities.
The answer is C.
8.
Non cash items are added/deducted from Net Income in computing the net cash provided by operating activities.
Gain on sale of land is deducted from Net income.
The answer is C.
9.
Accounts receivable decrease indicates collection on Accounts receivable.
The answer is B.
10.
Amount of cash collected = 250,000 + 10,000 = 260,000
11.
Cash inflow from the sale of equipment = 17,000
Cash outflow for land purchased = (25,000)
Net cash used = 17,000 + (25,000) = (8,000)
The answer is B.
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