At the Beginning of the Year, Paid-In Capital Was $82

question 6

Multiple Choice

At the beginning of the year, paid-in capital was $82 and retained earnings was $47. During the year, the stockholders invested $24 and dividends of $6 were declared and paid. Retained earnings at the end of the year were $52. Net income for the year was:

• A) $10
• B) $11
• C) $15
• D) $20

Analyze the significance of discrepancies between net income and net cash flows from operating activities.

Identify strategies for managing and manipulating cash flow reporting.

Understand the treatment of non-cash financing and investing activities in the cash flow statement.

Understand the principles of cash flow statement preparation under both GAAP and IFRS.

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Definitions:

Intuitive

Relating to the ability to understand or know something without conscious reasoning; instinctive.

Centrated

Focusing attention on one aspect of a situation or object while ignoring others, a concept found in Piaget's theory of cognitive development.

Irreversible

A process or event that cannot be undone or reversed once it has occurred.

Symbolic Function

Piaget’s term for ability to use mental representations (words, numbers, or images) to which a child has attached meaning.