Question

1. Land costing $78,600 was sold for $92,800 cash. The gain on the sale was reported on the income statement as other revenue. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

a.$171,400

b.$78,600

c.$92,800

d.$14,200

2. A building with a book value of $35,143 is sold for $56,651 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of

a.$35,143 from investing activities

b.$56,651 from investing activities

c.$56,651 from investing activities and a deduction from net income of $21,508

d.$35,143 from investing activities and an addition to net income of $21,508

3. A corporation uses the indirect method for preparing the statement of cash flows. A fixed asset has been sold for $22,755 representing a gain of $3,667. The value in the operating activities section regarding this event would be

a.$19,088

b.$3,667

c.$22,755

d.$26,422

4. Income tax was $376,355 for the year. Income tax payable was $33,328 and $40,800 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is

a.$450,483

b.$376,355

c.$368,883

d.$383,827

5. On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would include

a.payments for cash dividends

b.receipts from the issuance of capital stock

c.gains or losses on fixed assets

d.receipts from the sale of investments

Answer 1