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:

Comparative Statements

Financial statements that present data for more than one accounting period side by side to facilitate analysis and identify trends.

Price-level Accounting

An accounting method that adjusts financial statements to reflect changes in the purchasing power of money due to inflation or deflation.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity of the company.

Long-term Investments

Investments made with the intention of holding them for an extended period, typically more than one year, such as bonds, stocks, or real estate.