Message Company uses the indirect method to prepare its statement of cash flows
Refer to the following portion of the comparative balance sheet:
Message Company
Comparative Balance Sheet
December 31, 2017 and 2016
2016 2015 Increase/(Decrease)
Common Stock $18,000 $12,400 $5,600
Retained Earnings 113,000 80,000 33,000
Treasury Stock (8,000 ) (5,400 ) (2,600 )
Total Equity $123,000 $87,000 $36,000
Note:
1. There was no retirement of stock during the year.
2. There were no sales of treasury stock during the year.
Which of the following statements is correct?
A) There was zero net cash flow from transactions involving Common Stock.
B) There was a negative cash flow of $5,600 from the issuance of Common Stock.
C) There was a positive cash flow of $5,600 from the issuance of Common Stock.
D) There was positive cash flow of $18,000 from issuance of Common Stock.
C
You might also like to view...
Kurt Lewin developed his model of change in the 1950s. Which of the following is NOT part of his model of change?
a. Anti-Freeze b. Move (or change) c. Re-freeze d. Unfreeze
A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be:
A) an chart. B) a p-chart. C) a c-chart. D) an R-chart.
Which of the following instructional technologies can be used only when the students and the instructor are in the same location at the same time?
A) computer labs B) smartboards C) whiteboards D) webcasting
Answer the following statements true (T) or false (F)
1. If a company experiences a loss of inventory for fire, there is no way to estimate the inventory. 2. Danio Corp has $125,000 net sales revenue and a historical gross profit percentage of 25%; therefore, the estimated cost of goods sold is $31,250. 3. Betta Co. has $45,000 net sales revenue and a historical gross profit percentage of 30%; therefore, the estimated cost of goods sold is $31,500. 4. Inventory is the most important asset in a service business. 5. Inventory turnover equals average ending inventory divided by cost of goods sold.