Mars Chemicals Company uses the indirect method to prepare its statement of cash flows
Refer to the following portion of the comparative balance sheet:
Mars Chemicals Company
Comparative Balance Sheet
December 31, 2017 and 2016
2016 2015 Increase/(Decrease)
Common Stock $33,000 $2,500 $30,500
Retained Earnings 154,000 155,000 (1,000 )
Treasury Stock (8,500 ) (5,200 ) (3,300 )
Total Equity $178,500 $152,300 $26,200
Net Income for the year was $60,000.
Which of the following statements is true of Taylor's statement of cash flows for 2016?
A) The company issued stocks for $33,000.
B) The company declared $61,000 as dividends.
C) The company purchased treasury stock for $8,500.
D) The net cash flow from financing activities is $178,500.
B .B)
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On the balance sheet, the cumulative amount of depreciation expense recognized to date on a fixed asset is called:
A) accumulated amortization. B) accumulated depreciation. C) amortization expense. D) depreciation expense.
Suppose a U.S. importer purchases an Italian product today but will not pay for it for 90 days. The
cost of the product today is 35,000 euros. The spot exchange rate today is .6233 euros per dollar. The importer creates a forward-market hedge. The 90-day forward rate is .6100 euros per dollar. The amount the U.S. importer will pay in 90 days is A) $56,667. B) $57,377. C) $56,153. D) $55,683.
On January 1, 2017, Dawson, Incorporated, paid $100,000 for a 30% interest in Sacco Corporation. This investee had assets with a book value of $550,000 and liabilities of $300,000. A patent held by Sacco having a book value of $10,000 was actually worth $40,000 with a six-year remaining life. Any goodwill associated with this acquisition is considered to have an indefinite life. During 2017, Sacco reported net income of $50,000 and paid dividends of $20,000 while in 2018 it reported net income of $75,000 and dividends of $30,000. Assume Dawson has the ability to significantly influence the operations of Sacco.The equity in income of Sacco for 2018, is:
A. $21,000. B. $13,500. C. $22,500. D. $12,000. E. $75,000.
The equation which shows a company's resources equal claims to those resources is:
A. Common Stock + Retained Earnings = Stockholders' Equity. B. Cash Increases ? Cash Decreases = Change in Cash. C. Assets = Liabilities + Stockholders' Equity. D. Revenues ? Expenses = Net Income.