16. Mendes Charters reported the following information at December 31, 2015:

Preferred stock, $100 par, 500 shares authorized, and outstanding;

cumulative; nonparticipating; callable at par value $50,000

Common stock, $12 par, 50,000 shares authorized and outstanding 600,000

Additional paid-in capital--Common 25,000

Retained earnings 825,000

Mendes total contributed capital is

a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000

17. Which of the following should be considered when a company decides to declare a cash dividend on common stock?

a. The retained earnings balance only

b. The amount of authorized shares of common stock

c. The book value of the company's stock

d. The cash available and the retained earnings balance

18. The primary reason for a stock split is to

a. distribute cash to the investor.

b. decrease the market value of the stock.

c. decrease the number of shares outstanding.

d. increase the contributed capital of the corporation.

19. Nordic Exports Inc. reported net income of $150,000 for 2015, but its cash balance decreased $40,000. Which financial statement should Nordic Exports management refer to for an explanation of this situation? a

. Balance Sheet

b. Income Statement

c. Statement of Retained Earnings

d. Statement of Cash Flows

20. The primary purpose of the statement of cash flows is to provide information about

a. the financial position of the company.

b. the profitability of the company.

c. the investing and financing activities of the company.

d. the cash inflows and outflows of the company.

21. Cash flows from acquiring and disposing of long-term assets are classified as

a. operating activities.

b. investing activities

. c. financing activities.

d. purchasing activities.

22. Cash flows from borrowing and paying off a 90-day bank loan are classified as

a. operating activities. b. investing activities. c. financing activities. d. purchasing activities.

23. Cash flows from issuing and repurchasing stock or issuing and repaying (retiring) debt are classified as

a. operating activities. b. investing activities. c. financing activities. d. borrowing activities.

24. Cash flows from acquiring and selling products are classified as

a. operating activities. b. investing activities. c. financing activities. d. distribution activities.

25. Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2016:

Operating activities:

Net income $ 92,000

Add: Depreciation 20,000

Decrease in accounts receivable 8,000

__________

$120,000

Deduct: Decrease in accounts payable (6,000)

Net cash inflow from operating activities $114,000

Which method of preparing the operating activities section has Golden Consulting used?

a. The direct method b. The indirect method c. Either method d. Cannot be determined without further information