Use the Following Information for Questions 102 and 103

question 74

Multiple Choice

Use the following information for questions 102 and 103.
A flood damaged a building and contents. Floods are unusual and infrequent in this area. The receipts from insurance companies totaled $500,000, which was $150,000 less than the book values. The tax rate is 30%.
-On the statement of cash flows (indirect method) , the receipts from insurance companies should

• A) be shown as an addition to net income of $350,000.
• B) be shown as an inflow from investing activities of $350,000.
• C) be shown as an inflow from investing activities of $500,000.
• D) not be shown.

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Definitions:

Manufacturer

An entity or individual that makes goods through a process involving raw materials, machinery, and labor.

Shipment

The process of transporting goods from one location to another.

Counteroffer

A proposal made in response to an original offer, changing its terms in the hopes of reaching an agreement.

Settlement Amount

The sum of money agreed upon by parties to resolve a dispute or claim without continuing to trial.