2. Liberty Corporation had net income of $120,000 during the year. Depreciation
ID: 2545528 • Letter: 2
Question
2. Liberty Corporation had net income of $120,000 during the year. Depreciation expense was $6,000. The following information is available:
What amount should Liberty report as net cash provided by operating activities in its statement of cash flows for the year?
Multiple Choice
$20,000
$30,000
$10,000
$146,000
3. Green Co. purchased commercial paper with a maturity of 60 days. Green Co. treats as cash equivalents all highly liquid investments with an original maturity of three months or less when purchased. How should this purchase be reported in Green’s statement of cash flows?
Multiple Choice
Not reported.
As an outflow from investing activities.
As an outflow from operating activities.
As an outflow from financing activities.
5. A company reacquired some of its own stock to be held as treasury stock and used for its employee’s 401K plan. In their statement of cash flows how would this cash outflow be reported?
Multiple Choice
Either under investing activities or financing activities.
Under operating activities.
Under financing activities.
Either under operating activities or financing activities.
Held- to-Maturity Bonds purchased 25,000 increase Common Stock issued 70,000 increase Accounts Receivable 10,000 decrease Accounts Payable 15,000 increase Gain on sale of AFS Investment 5,000 increaseExplanation / Answer
As per chegg guidelines when there are more than one question then we have to answer first question. 2) Statement of Cash Flow from operating activities Particulars Amount Net Income 1,20,000.00 Gain on sale of AFS investment (5,000.00) Depreciation 6,000.00 Decrease in Accounts recievable 10,000.00 Increase in accounts payable 15,000.00 Net cash provided by operating activities 1,46,000.00 So correct answer is $146000
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