1. Which of the following is an investing activity?

A. Collecting the principal of a long-term note

B. Withdrawals of cash made by a partner

C. Issuing common stock for cash

D. Issuing bonds at a discount

E. Retiring bonds before their maturity date at less than par value

2. Beginning merchandise inventory was $14,000, and ending merchandise inventory was $22,000. During the year, prepaid rent decreased by $6,000, accounts receivable increased by $6,200, and accounts payable increased by $3,000. What is the net effect of these changes in on the statement of cash flows?

A. Cash flows from Operating Activities will decrease by increase +4,800

B. Cash flows from Operating Activities will decrease by $5,200

C. Cash flows from Operating Activities will decrease by $17,600

D. Cash flows from Operating Activities will increase by $5,200

E. None of the above