D) aiue wll be credited for $210,000. Cash will be debited for $185.000 32. If c
ID: 2590978 • Letter: D
Question
D) aiue wll be credited for $210,000. Cash will be debited for $185.000 32. If common stock is issued for an amount greater than par value, the excess should be credited to A) Cash. B) Retained Earnings C) D) Legal Capital. Additional Paid-in Capital 33. A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording i at cost. What will be the effect on total stockholders' equity? A) Increase by $525,000 B) Decrease by $300,000. C) Decrease by $525,000 D) Decrease by $225,000. 34. The primary purpose of the statement of cash flows is to A) B) C) D) provide information about the investing and financing activities during a period. prove that revenues exceed expenses if there is a net income. provide information about the cash receipts and cash payments during a period. facilitate banking relationships. 35. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows. A) Operating activities section. B) Investing activities section. C) Financing activities section. D) Does not represent a cash flow. 36. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, long-term debt retired with cash would be classified on the statement of cash flows. A) R) Operating activities section. Investing activities section.Explanation / Answer
Answers are as follows :
32: C Additional paid in capital
Reason: any amount in excess is called additional Paid in capital.and which is a part of total stockholders equity..
33 C : decreases by $525000
As purchase of own stock will reduce total stockholders equity by 15000*35= $525000
34 : C cash flow statement provides information about cash received and cash payments .
35: A : operating activity section.
As changes in current assets and current liabilities are shown in as part of operating activity section of cash flow.statement.
36 Financing activity section.
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