1. The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

A) Investing activities.

B) Schedule of non-cash investing or financing activity.

C) Financing activities.

D) Operating activities.(Incorrect)

E) This is not reported on the statement of cash flows.

2. The direct method of reporting operating cash flows:

A) Must be used by all companies.

B) Separately lists cash receipts and payments.

C) Is considered supplementary disclosure (Incorrect)

D) Is not recommended by the FASB, but is commonly used.

E) Is used by most companies.

3. A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported in the operating activities section reported under the direct method is:

A) $0.

B) $45,000.

C) $50,000 Incorrect

D) $5,000.

E) $35,000.