Below Is an Example of an Incorrectly Prepared Statement of Cash

question 75

Multiple Choice

Below is an example of an incorrectly prepared statement of cash flows. The descriptions of activities are correct. $\begin{array}{l}\text { Cash from operating activities }\\\begin{array}{lr}\text { Net income } & \$ 60,000 \\\text { Depreciation } & (4,000) \\\text { Increase in accounts receivable } & (2,000) \\\text { Increase in deferred tax liability } & (1,000) \\&\$53,000\\\\ \text { Cash from investing activities } &\\ \text { Purchase of marketable securities} &(\$48,000) \\ \text {Dividends paid } &(\$46,5000) \\\\\text { Cash from financing activities } & \\\text { Increase in short-term debt } & \$(500) \\\text { Increase in long-term debt } & (2,500) \\& \$(3,000) \\\text { Increase in cash } & \$ 3,500\end{array}\end{array}$
-The correct cash flows from operating activities is:

• A)$65,500.
• B)$63,500.
• C)$53,500.
• D)None of the above

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