[The Following Information Applies to the Questions Displayed Below

question 102

Multiple Choice

[The following information applies to the questions displayed below.]
An analysis of Kenny Corporation's Investment in Marketable Securities account during 2018 disclosed the following:
Kenny's 2018 income statement included a $90,000 loss on sale of marketable securities and $65,000 dividend income from marketable securities.All payments and proceeds relating to marketable securities transactions were in cash.
-How should the transactions involving marketable securities be classified in Kenny's statement of cash flows for 2018?

• A)The purchase of marketable securities,sales of marketable securities,and receipt of dividends are all classified as investing activities.
• B)The purchase and the sale of marketable securities are classified as investing activities;the receipt of dividends is classified as an operating activity.
• C)The purchase of marketable securities is classified as an investing activity;the sale of marketable securities is classified as a financing activity;the receipt of dividends is classified as an operating activity.
• D)The purchase and the sale of marketable securities are classified as investing activities;the receipt of dividends is classified as a financing activity.

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Definitions:

Cash Dividend

A cash distribution of earnings by a corporation to its shareholders.

Financing Activities

These activities relate to changes in the size and composition of the equity and borrowings of an entity, reported in the statement of cash flows.

Retirement

The act of leaving one's job and ceasing to work, often due to age, after a career of service, with financial support through savings, investments, or pensions.

Long-Term Note

A debt security with a maturity of more than one year, used by businesses and governments to borrow money.