Exhibit 12-3 Stalwart Inc. Accounting Records Show the Following Changes During the During

question 26

Multiple Choice

Exhibit 12-3
Stalwart Inc. accounting records show the following changes during the company's most recent fiscal year.
1.Gain on sale of
2.Loss on sale of long-term investments
3.Decrease in prepaid expenses
4.Increase in accounts receivable
5.Decrease in merchandise inventory
6.Decrease in wages payable
7.Increase in accounts payable
8.Payment of cash dividends
9.Purchase of machinery
10.Payments of principal on bonds payable
11.Proceeds from sale of long-term investments
-Refer to Exhibit 12-3.Which of these would be deducted from net income as part of the operating activities section,when using the indirect method of preparing the statement of cash flows?

• A)2,3,5,7,8,& 10
• B)1,4,& 6
• C)2,3,5,& 7
• D)3,4,5,6,& 7
• E)None of the answer choices is correct.

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