Question

Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is...

Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is $13,875, and the accumulated depreciation on these fixtures is $7,063 at the time of sale. The fixtures are sold for $4,744. The value of this transaction in the investing section of the statement of cash flows is

a.$2,068

b.$13,875

c.$6,812

d.$4,744

Cash dividends of $83,151 were declared during the year. Cash dividends payable were $9,322 at the beginning of the year and $14,518 at the end of the year. The amount of cash for the payment of dividends during the year is

a.$83,151

b.$97,669

c.$77,955

d.$73,829

A building with a book value of $46,685 is sold for $58,312 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

an increase of $46,685 from investing activities and an addition to net income of $11,627

an increase of $46,685 from investing activities

an increase of $58,312 from investing activities

an increase of $58,312 from investing activities and a deduction from net income of $11,627

Homework Answers

Answer #1

Solution 1:

Value of the transaction in the investing section = Sale value of the fixtures = $4,744

Hence option "d" is correct.

Solution 2:

amount of cash for the payment of dividends = Dividend declared + beginning dividend payable - Ending dividend payable

= $83,151 + $9,322 - $14,518 = $77,955

Hence option "c" is correct.

Solution 3:

Gain on sale of building = $58312 - $46685 = $11,627 (Gain will be deducted from net income).

Sale value = $58,312 (Increase in investing activity)

Hence "an increase of $58,312 from investing activities and a deduction from net income of $11,627" is correct.

Last option is correct.

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