Santana Industries Prepares Its Cash Flow Statement Using the Direct

question 88

Multiple Choice

Santana Industries prepares its cash flow statement using the direct method.Santana sold equipment with a book value of $6,400 at a loss of $800.The amount to be reported on the cash flow statement under operating activities is:

• A) $800
• B) $5,800
• C) $6,400
• D) This is not an operating activity.

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Definitions:

Shareholders

Individuals or entities that own shares in a company, giving them ownership interest.

Tax Liability

The total amount of taxes owed by an individual, corporation, or other entity to the government within a given tax period.

Canadian-Controlled Private Corporation (CCPC)

A Canadian-Controlled Private Corporation (CCPC) is a classification in Canada for a privately held company that is controlled by Canadian residents.

Earnings Before Taxes (EBT)

A measure of a company's profitability that calculates income before the deduction of tax expenses.