A Company Has a Net Cash Inflow from Operating Activities

question 74

Multiple Choice

A company has a net cash inflow from operating activities of $789,000,a net cash outflow of $50,000 from investing activities and a net cash inflow of $100,000 from financing activities.The company paid $124,000 in interest,$186,500 in income taxes,and $200,000 in cash dividends.Which of the following statements about the statement of cash flows is not correct?

• A)The cash dividends of $200,000 paid will be reported as a cash outflow in the cash flow from investing activities section.
• B)Supplemental disclosures required for a company using the indirect method include the amount of interest and the amount of income taxes paid.
• C)The statement of cash flows will show a net increase in cash and cash equivalents of $839,000.
• D)If the direct method is used,the $124,000 of interest paid and the $186,500 of income taxes paid will be reported in the cash flows from operating activities.

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Definitions:

1942-1946

A period during World War II noted for significant global conflicts, political changes, and the beginning of the post-war recovery phase.

WAVES

A division of the U.S. Navy during World War II, consisting of women volunteers who served in non-combat roles.

Noncommissioned Officers

Military personnel who have earned a position of authority by promotion through the ranks rather than by commission; they serve as essential links between the enlisted personnel and the commissioned officers.

Second World War

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.