Below Is an Example of an Incorrectly Prepared Statement of Cash

question 21

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 Cash flows from operating activities is:

• A) 65,500
• B) 63,500
• C) 53,500
• D) none of the above

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Definitions:

Email Communication

The exchange of messages between individuals or groups through electronic mail services.

Routine Activities

Regular, daily activities or tasks that are performed as part of one’s schedule or work.

Negative Critiques

Evaluations or feedback that focus on the shortcomings or failures of a work or performance.

Annual Report

A comprehensive report on a company's activities, financial performance, and strategy throughout the preceding fiscal year.