The Following Information Has Been Taken from the Consolidation Worksheet

question 79

Multiple Choice

The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company.(1.) Graham reports a loss on sale of land (to an outside party) of $5,000. The land cost Graham $20,000.(2.) Noncontrolling interest in Stage's net income was $30,000.(3.) Graham paid dividends of $15,000.(4.) Stage paid dividends of $10,000.(5.) Excess acquisition-date fair value over book value amortization was $6,000.(6.) Consolidated accounts receivable decreased by $8,000.(7.) Consolidated accounts payable decreased by $7,000.Using the indirect method, where does the decrease in accounts receivable appear in a consolidated statement of cash flows?

• A) $8,000 increase to net income as an operating activity.
• B) $8,000 decrease to net income as an operating activity.
• C) $6,400 increase to net income as an operating activity.
• D) $6,400 decrease to net income as an operating activity.
• E) $8,000 increase as an investing activity.

---

Definitions:

Parietal Bones

Two bones forming the sides and roof of the cranium, each positioned on either side of the skull just behind the frontal bone.

Symphysis Pubis

A type of cartilaginous joint located between the left and right pubic bones near the front of the pelvis, providing slight movement and shock absorbtion.

Sacrum

A triangular bone at the base of the spine, formed by the fusion of several vertebrae and connecting the spine to the pelvis.

Atlantoaxial Joint

A joint between the first and second cervical vertebrae of the spine, allowing for head rotation.