A building costing $550,000 with accumulated depreciation of $225,000 was sold for $275,000 cash. Which of the following statements is correct with respect to preparing the cash flow statement if the indirect method is being used?
A. $50,000 will be added to net income to determine cash flow from operating activities and $325,000 will be reported as a cash outflow in the investing activities section.
B. $50,000 will be deducted from net income to determine cash flow from operating activities and $275,000 will be reported as a cash inflow in the investing activities section.
C. $275,000 will be added to net income to determine cash flow from operating activities and $325,000 will be reported as a cash outflow in the investing activities section.
D. $50,000 will be added to net income to determine cash flow from operating activities and $275,000 will be reported as a cash inflow in the investing activities section.
Answer: D
You might also like to view...
Which of the following describes the purpose(s) of closing entries?
A. Transfer the balances of temporary accounts to common stock. B. Transfer the balances of temporary accounts to common stock; reduce the balances of the temporary accounts to zero to prepare them for measuring activity in the next period. C. Adjust the balances of asset and liability accounts for unrecorded activity during the period. D. Reduce the balances of the temporary accounts to zero to prepare them for measuring activity in the next period.
Strategy, at its essence, is about
A. developing lasting success that can support growth and secure the company's future over the long term. B. building profits for short-term success. C. re-creating a business model with regularity. D. matching rival businesses' products and quality dimensions in the marketplace. E. realigning the market to provoke change in rival companies.
Exhibit 11-2 Browning purchased a business copier for $4,500 on August 3, 2016. It has an estimated residual value of $500 and an expected service life of five years. Browning uses double-declining-balance depreciation computed to the nearest whole month. Refer to Exhibit 11-2. Depreciation expense for 2017 should be
A. $600 B. $667 C. $750 D. $1,500
As he labors at his keyboard, Antonio is discovering one negative consequence of the rise in jobs that involve knowledge work. This negative consequence is most likely the fact that
A. employees may have unrealistic expectations about the amount of money they can earn in particular jobs. B. employees are more likely to expect employers to give them extra days of paid vacation, as well as sick leave. C. employers may have unrealistic expectations about the speed at which employees can complete tasks. D. employers are more likely to demand that employees be at work eight hours a day, five days a week. E. employers will expect employees to account for their activities on a minute-by-minute basis.