Below Is an Example of an Incorrectly Prepared Statement of Cash

question 22

Multiple Choice

Below is an example of an incorrectly prepared statement of cash flows. The descriptions of activities are correct.
$\begin{array}{l}\text { Cash from operating activities }\\\begin{array}{lr}\text { Net Income } & \$ 60,000 \\\text { Depreciation } & (4,000) \\\text { Increase in accounts receivable } & (2,000) \\\text { Increase in deferred tax liability } & (1,000) \\& \$ 53,000 \\\hline\text{Cash from investing activities}&\\\text{Purchase of marketable securities}&\$(48,000) \\\text{Dividends paid}&\$(1,500) \\& \$(46,500) \\\hline\text{Cash from financing activities}&\\\text{Increase in Short-term debt}&\$(500) \\\text{Increase in Long-term debt}&(2,500) \\&\$(3,000) \\\text{Increase in cash}&\$ 3,500 \\\end{array}\end{array}$
-The correct change in cash for the year is:

• A) $4,000
• B) $15,000
• C) $16,500
• D) none of the above

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Definitions:

Interposition

A visual cue in which one object partially covers another, leading to the perception of depth and order in visual space.

Parapsychology

The study of paranormal phenomena, including ESP and psychokinesis.

Psychokinesis

The claimed ability to move or manipulate objects with the mind without physical interaction.

ESP

Extrasensory perception, the ability to gain information about an object, person, location, or physical event through means other than the known human senses.