In Preparing Its Cash Flow Statement for the Year Ended

question 19

Multiple Choice

In preparing its cash flow statement for the year ended December 31, 2018, Green Co. gathered the following data: $\begin{array}{lll}\text {Gain on sale of land }&\$12,000\\\text {Proceeds from sale of land }&20,000\\\text {Purchase of Blue, Inc., bonds (facevalue \( \$ 200,000 \) ) }&360,000\\\text { Amortization of bond discount}&4,000\\\text {Cash dividends declared }&90,000\\\text { Cash dividends paid}&76,000\\\text { Proceeds from sales of Red Co. common stock}&150,000\\\end{array}$
In its December 31, 2018, statement of cash flows, what amount should Green report as net cash from financing activities?

• A) $40,000.
• B) $54,000.
• C) $60,000.
• D) $74,000.

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Definitions:

Duopoly

Duopoly is a market structure characterized by two firms controlling the majority of the market share, often leading to strategic behavior in price and output decisions.

Profit

The financial gain achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Collusion

An agreement among firms, usually in secret, to fix prices or to divide markets among themselves, which restricts competition.

Fix Prices

Fix prices involves setting product or service prices at a certain level, often agreed upon among competitors to avoid undercutting each other, which is illegal in many jurisdictions.