Exhibit 12-4
Manning Company Uses the Indirect Method to Prepare $\bullet$

question 38

Multiple Choice

Exhibit 12-4
Manning Company uses the indirect method to prepare the statement of cash flows.The following amounts are shown in its December 31,2013,financial statements.

-The following information is from the noncurrent asset portion of Randle Company's balance sheet.

The following activities occurred during 2013:
$\bullet$ Sold equipment with an original cost of $8,000 and a book value of $2,500 for $2,000 cash.
$\bullet$ Depreciation expense for the year totaled $18,000.
$\bullet$ Purchased property for $23,000 cash.
$\bullet$ Purchased long-term investments for $12,000 cash.
What is the amount of cash used by investing activities?

• A)$27,000
• B)$51,000
• C)$33,000
• D)$14,500
• E)None of the answer choices is correct.

---

Definitions:

Taxed on Income

The practice where individuals or entities are required to pay a portion of their earnings or profits to the government as tax.

Uniform Partnership Act

Legislation that provides a standard framework for the governance of business partnerships within the United States.

Governing Partnership Law

Refers to the set of legal rules and regulations that prescribe the functioning, formation, and dissolution of partnerships between individuals or entities.

Agent

An individual authorized to act on behalf of another person or entity, known as the principal, in dealings with third parties.