Suzanne Inc

question 22

Multiple Choice

Suzanne Inc.'s policy is to report all cash flows arising from interest and dividends in the operating activities section.The activities for the year ended December 31,2018 included the following: • Interest revenue for the period was $12,000.The interest receivable account decreased $3,000.
• Sold an available-for-sale investment for $10,000.The book value was $5,000.
How much would be presented as cash flow from operating activities?

• A)Proceeds from disposal in the amount of 10,000 + Interest received in the amount of 12,000.
• B)Proceeds from disposal in the amount of 10,000 + Interest received in the amount of 15,000.
• C)Gain on sale in the amount 5,000 + Interest received in the amount of 12,000.
• D)Gain on sale in the amount 5,000 + Interest received in the amount of 15,000.

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Definitions:

Ending Inventory

The total value of all unsold goods at the end of an accounting period, including raw materials, work-in-progress, and finished goods.

Beginning Inventory

The value of a company's inventory at the start of an accounting period, before any purchases or sales have been made.

Absorption Costing

An accounting method that assigns all manufacturing costs, including both variable costs and fixed overhead, to the production units, making them more expensive on a per-unit basis.

Break-even

The financial point at which revenues exactly match costs, resulting in no net loss or gain.