18. Cash Receipts from Interest received and Dividends Received are classified a
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18. Cash Receipts from Interest received and Dividends Received are classified as A) Financing activities. (Cash Flow - FIN) B) Investing activities. (Cash Flow - INV C) Operating activities. (Cash Flow - OPS) D) either financing or investing activities. (Cash Flow - Fin, or Cash Flow INV) 19. Vision Company purchased Treasury Stock (T/S) with a cost of S16,000 during 2014. During the year, the company paid Dividends (DIV) of S20,000 and issued Bonds Payable (B/P) for proceeds of $860,000. Cash flows from financing activities for 2014 total (Cash Flow - FIN) A) $840,000 net cash inflow. B) $856,000 net cash inflow. C) $860,000 net cash outflow. D) $824,000 net cash inflow. 20. Bush Company reported net income (NI) of S60,000 for the year. During the year, accounts receivable (A/R) decreased by $8,000, accounts payable (A/P) increased by $4,000 and Depreciation Expense of $5,000 was recorded. Net cash provided by operating activities for the year is (Cash Flow - OPS) A) $48,000 B) $77,000. C) $59,000. D) $55,000. 21. The Net Income reported on the income statement for the current year was (ND) s220,000. Depreciation recorded on plant assets was $35,000. Accounts receivable (A/R) and inventories (INVENT) increased by $2,000 and $8,000, respectively. Prepaid expenses (PPE) decreased by $2,000, and accounts payable (A/P) decreased by $12,000. How much cash was provided by operating activities? (Cash Flow - OPS) A) $200,000 B) $235,000 C) $220,000 D) $255,000Explanation / Answer
Answer 18 is C.
Cash receipts from Interest received and Dividends received are included in net income and shown in operating activities.
We show only purchase or sale of fixed assets in investing activities.
Answer 19 is D.
Net Cash flow from Financing Activities = Proceed from Issue of Bonds Payable - Cash Dividend paid - Purchase of Treasury Stock
Net Cash flow from Financing Activities = $860,000 - $20,000 - $16,000
Net Cash flow from Financing Activities = $824,000
Answer 20 is B.
Net Cash Flow from Investing Activities = Net Income + Decrease in A/R + Increase in A/P + Depreciation
Net Cash Flow from Investing Activities = $60,000 + $8,000 + $4,000 + $5,000
Net Cash Flow from Investing Activities = $77,000
Answer 21 is B.
Net Cash Flow from Investing Activities = Net Income + Depreciation - Increase in A/R - Increase in Inventory + Decrease in Prepaid Expense - Decrease in A/P
Net Cash Flow from Investing Activities = $220,000 + $35,000 - $2,000 - $8,000 + $2,000 - $12,000
Net Cash Flow from Investing Activities = $235,000
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