The Following Information Has Been Taken from the Consolidation Worksheet

question 9

Multiple Choice

The following information has been taken from the consolidation worksheet of Graham Company and its 80% owned subsidiary, Stage Company.
(1) ) Graham reports a loss on sale of land of $5,000. The land cost Graham $20,000.
(2) ) Non-controlling interest in Stage's net income was $30,000.
(3) ) Graham paid dividends of $15,000.
(4) ) Stage paid dividends of $10,000.
(5) ) Excess acquisition-date fair value over book value was expensed by $6,000.
(6) ) Consolidated accounts receivable decreased by $8,000.
(7) ) Consolidated accounts payable decreased by $7,000.
How will dividends be reported in consolidated statement of cash flows?

• A) $15,000 decrease as a financing activity.
• B) $25,000 decrease as a financing activity.
• C) $10,000 decrease as a financing activity.
• D) $23,000 decrease as a financing activity.
• E) $17,000 decrease as a financing activity.

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Definitions:

Automatized Behavior

Actions or behaviors that have become automatic due to repetition and are performed without conscious thought.

Cognitive Processes

Mental activities involved in the acquisition, processing, and storage of knowledge.

Stereotype

Overgeneralized beliefs about a particular category of people that simplifies the complexity of human behaviors and characteristics.

Heuristic Processing

A method of decision-making or reasoning based on simplified strategies or 'rules of thumb', rather than systematic analysis.