2.Investments in equity securities are adjusted to fair value at the end of the period. (True/False)

10. Yellow Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/20 and 12/31/21 contained the following errors:

2020 2021

Salary Expense $40,000 understatement $60,000 overstatement

Depreciation expense 15,000 understatement 40,000 overstatement

Assume that the 2021 errors were not corrected and that no errors occurred in 2019. By what amount will 2021 income before income taxes be overstated or understated?

22. Mint, Inc. reported net income of $80,000 for the year ended December 31, 2021. Included in net income were depreciation expense of $10,800 and a gain on sale of equipment of $2,400. The equipment had an historical cost of $70,000 and accumulated depreciation of $55,000. Each of the following accounts increased during 2021:

Land $15,000

Prepaid rent $18,600

Bonds payable $20,000

Accounts Receivable $10,000

What is the amount of cash provided by or used by investing activities for Mint, Inc. for the year ended December 31, 2021?

25. The primary point of statement of cash flows is to determine the amount that cash changed during the period. (True/False)

30.A company recorded a deferred tax liability in 2021 in the amount of $500. $200 of the deferred tax liability will reverse in 2022 and $300 of the deferred tax liability will reverse in 2023. In a statement of cash flows using the indirect method, the decrease in the deferred tax liability of $300 should be deducted from net income in arriving at cash from operating activity. (True/False)