___ 39. The net income reported on the income statement for the current year was $205,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $2,000 and $8,000, respectively. Prepaid expenses and accounts payable decreased by $1,000 and $11,000, respectively. Stock was issued for $20,000 and dividends paid amounted to $15,000. How much cash was provided by operating activities?

A) $243,000

B) $228,000

C) $223,000

D) $221,000

E) $208,000

___ 40. Common stock of $125,000 was issued in exchange for land with a fair market value of $175,000. On the statement of cash flows, this transaction would be reported in

A) the cash flows from financing activities section.

B) the cash flows from investing activities section.

C) the cash flows from operating section.

D) a separate schedule and note to the financial statements.

E) All of the above.

___ 41. Buster Company sold a long-term investment for $250,000 and reported a gain on the sale of $12,000. Which of the following statements is true with regards to Buster's cash flow statement?

A) A cash inflow of $12,000 will be reported in the operating activities section.

B) A cash outflow of $12,000 will be reported in the investing activities section.

C) A cash inflow of $250,000 will be reported in the investing activities section.

D) A cash inflow of $262,000 will be reported in the investing activities section.

E) A cash inflow of $238,000 will be reported in the investing activities section.

___ 42. Buster Company paid its stockholders cash dividends of $20,000. Which of the following statements is true with regards to Buster's cash flow statement?

A) A cash outflow of $20,000 will be reported in the investing activities section.

B) A cash outflow of $20,000 will be reported in the financing activities section.

C) A cash outflow of $20,000 will be reported in the operating activities section.

D) Both B) and C) are true.

E) Dividends are not reported on the cash flow statement.

___ 43. During the year Buster Company's accounts payable decreased by $22,000. With regards to Buster's cash flow statement, this would result in

A) a deduction from net income in the operating activities section.

B) an addition to net income in the operating activities section.

C) a deduction in the financing activities section.

D) an addition in the financing activities section.

E) no effect on the cash flow statement.

___ 44. Buster Company retired bonds having a face value of $300,000. Which of the following statements is true with regards to Buster's cash flow statement?

A) A cash outflow of $300,000 will be reported in the financing activities section.

B) A cash outflow of $300,000 will be reported in the investing activities section.

C) A cash inflow of $300,000 will be reported in the financing activities section.

D) A cash inflow of $300,000 will be reported in the investing activities section.

E) The transaction will be reported in significant non-cash financing activities.