Exhibit 12-2 Carr Company Has the Following Cash Flows to Account For

question 25

Multiple Choice

Exhibit 12-2
Carr Company has the following cash flows to account for:
(1) Cash receipts for the sale of common stock.
(2) Cash payments for the purchases of merchandise.
(3) Cash receipts from the collection of accounts receivable.
(4) Cash receipts from the collection of principal on loans made to others.
(5) Cash payments to shareholders for dividends.
(6) Cash payments for the purchase of machinery.
-Refer to Exhibit 12-2.Which of these items would appear in the financing activities

• A)1 & 6
• B)2 & 3
• C)1 & 5
• D)4 & 6
• E)None of the answer choices is correct.

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Definitions:

Acquisition

The process of obtaining control of another corporation or business entity through purchase or merger.

Business Combination

A process where two or more companies merge or one acquires another, resulting in consolidation of assets and liabilities.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements, helping to combine the financials of a parent company and its subsidiaries and eliminate inter-company transactions.

Acquisition Transaction

The process by which one company purchases most or all of another company's shares or assets, effectively taking control of the target company.