Below Is an Example of an Incorrectly Prepared Statement of Cash

question 7

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 investing activities is:

• A) ($41,000)
• B) ($45,500)
• C) ($48,000)
• D) none of the above

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