A Firm Sold an Investment in Securities Available for Sale

question 55

Multiple Choice

A firm sold an investment in securities available for sale originally costing $30,000,for $28,000.At the beginning of the year,the investment had a valuation allowance of $3,000,debit.What is the correct disclosure for these events in the statement of cash flows prepared under the direct method,assuming this is the only investment in securities available for sale?

• A) $28,000 investing cash inflow;add $33,000 in the reconciliation of earnings and net operating cash flow
• B) $28,000 investing cash inflow;add $2,000 in the reconciliation of earnings and net operating cash inflow
• C) $28,000 investing cash inflow;add $5,000 in the reconciliation of earnings and net operating cash inflow
• D) Add $5,000 in the reconciliation of earnings and net operating cash flow.

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An individual skilled in performing tasks related to the construction and maintenance of physical structures.

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A straight line joining two opposite corners of a polygon or polyhedron.

Diagonal

A straight line connecting opposite corners of a polygon, especially a quadrilateral.