[The Following Information Applies to the Questions Displayed Below

question 44

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, Jones Company issued bonds with a $200,000 face value, a stated rate of interest of 7.5%, and a 5-year term to maturity. The bonds were issued at 97. Interest is payable in cash on December 31st of each year. The company amortizes bond discounts and premiums using the straight-line method.

-What is the amount of cash outflow from operating activities shown on Jones' statement of cash flows for the year ending December 31,Year 2?

• A)$15,000
• B)$16,200
• C)$13,800
• D)$17,400

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Definitions:

Process Inventory

Refers to the goods and materials held by a company during its manufacturing process but not yet completed.

Cost System

A method or set of procedures used by organizations to track, record, and analyze costs associated with their operations.

Cost System

A method used to allocate costs to products, services, or projects in order to assess financial performance and profitability.

Process Inventory

Inventory that includes all the direct costs and manufacturing overhead involved in the production process until the goods are finished.