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Cash Flows

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A building with a book value of $ 45,000 is sold for $50,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows: ________.
an increase of $45,000 from investing activities
an increase of $50,000 from investing activities and a deduction from net income of $5,000
an increase of $50,000 from investing activities
an increase of $45,000 from investing activities and an addition to net income of $5,000

Cash dividends of $80,000 were declared during the year. Cash dividends payable were $10,000 and $15,000 at the beginning and end of the year, respectively. The amount of cash for the payment of dividends during the year is _______.
$85,000
$80,000
$95,000
$75,000

Solution Preview

1. The book value is 45,000 and is sold for 50,000 cash. There is a gain of $5,000 on sale of building. This gain is shown as a deduction from net income under operating activity. It is shown as a deduction since in the income statement, this gain would have ...

Solution Summary

The solution explains two multiple choice questions relating to calculation of cash amounts

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