Examine Each of the Following Transactions (1)through (5)

question 84

Multiple Choice

Examine each of the following transactions (1) through (5) .Determine where each should be reported on a statement of cash flows.The possible locations are identified by items (a) through (e) .(1) Equity securities of another company were accepted in exchange for a copyright.(2) Received cash dividends.(3) Proceeds from the sale (discounting) of a loan made by the business.(4) Purchased treasury shares.(5) Received a settlement on a lawsuit.A - Operating activities.B - Investing activities.C - Financing activities.D - Schedule of noncash financing and investing activities.E - Not reported on the statement of cash flows.

• A)1 = C; 2 = B; 3 = A; 4 = B; 5 = A
• B)1 = B; 2 = A; 3 = C; 4 = B; 5 = E
• C)1 = D; 2 = A; 3 = B; 4 = C; 5 = A
• D)1 = C; 2 = C; 3 = B; 4 = C; 5 = E
• E)1 = D; 2 = A; 3 = A; 4 = B; 5 = E

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Definitions:

Customizing Department

A specialized unit within a company that modifies products to meet specific customer requirements or preferences.

Departmental Predetermined Overhead Rates

Overhead rates calculated for each department based on estimated costs and activity levels, used to allocate overhead costs to products.

Machine-Hours

Machine-Hours are a measure of the actual running time that a machine or group of machines operates during a given period.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, rent, and salaries for support staff.