Use This Information to Answer the Following Question

question 8

Multiple Choice

Use this information to answer the following question.

Oconee Corporation is preparing a statement of cash flows. The following transactions occurred during the year:

1. Sold machinery for $18,000 cash.
2. Purchased a building for $160,000 cash.
3. Issued $140,000 worth of stock to acquire an airplane.
4. Converted long-term bonds by issuing $200,000 worth of stock.
5. Declared and paid a $20,000 cash dividend.

Transaction 3 would be found on the statement of cash flows in the

• A) cash flows from operating activities section.
• B) cash flows from financing activities section.
• C) noncash investing and financing transactions section.
• D) cash flows from investing activities section.

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Definitions:

Controlled Group

A group of two or more entities that are connected through common ownership, allowing for centralized control and management.

Controlled Entities

These are entities over which another entity (the parent) has control, typically through ownership of more than half of the voting rights or through other mechanisms.

Associates

An entity over which an investor possesses significant influence, typically characterized by owning between 20% and 50% of the voting stock.

Joint Ventures

A partnership where multiple parties combine their assets to achieve a particular goal.