The Following Information Should Be Used to According to the Provisions

question 57

Multiple Choice

The following information should be used to according to the provisions of GAAP (Statement of Cash flows) and using the following data. $$\begin{array} { l r } \text { Net income } & \$ 50,000 \\\text { Provision for bad debts } & 2,000 \\\text { Increase in inventory } & 1,000 \\\text { Increase in accounts payable } & 2,000 \\\text { Purchase of new equipment } & 15,000 \\\text { Sale of equipment for } \$ 10,000 \text { gain } & 20,000 \\\text { Depreciation expense } & 5,000 \\\text { Repurchase of common stock } & 10,000 \\\text { Payment of dividend } & 4,000 \\\text { Interest payment } & 3,000\end{array}$$
-What is net cash flow from investing?

• A)$10,000
• B)$5,000
• C)($5,000)
• D)($15,000)

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Definitions:

Standby Underwriting

A type of underwriting agreement in which the underwriter agrees to buy any shares not purchased by investors during a public offering.

Underwriting Syndicate

A group of underwriters who come together to share the risk and to help sell an offering of securities to the public.

Rights Offering

A financial opportunity offered by a corporation to its existing shareholders to purchase additional shares directly from the company at a discounted price.

Firm Commitment

A guarantee given by an underwriter to purchase all the unsold shares in an initial public offering or a secondary offering.