The Following Information Was Taken from the 2011 Financial Statements $\bullet$

question 15

Multiple Choice

The following information was taken from the 2011 financial statements of Dunlop Corporation:

During 2011
$\bullet$ A $450,000 payment was made to retire bonds payable with a face amount of $500,000.
$\bullet$ Bonds payable with a face amount of $200,000 were issued in exchange for equipment.
In its statement of cash flows for the year ended December 31, 2011, what amount should Dunlop report as proceeds from issuance of bonds payable?

• A)$1,500,000
• B)$1,750,000
• C)$1,800,000
• D)$2,200,000

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Definitions:

Gold Coins

These are coins made primarily or exclusively of gold, often used historically as currency and currently as investment or collectible items.

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by central banking authorities.

Gold Coins

A type of currency made from gold, used historically as a medium of exchange and a store of value.

Small Denomination Time Deposits

Savings accounts or certificates of deposit in banks that have smaller balances and are subject to a specified time frame before withdrawal.