Company A purchased 1% of Company B's outstanding stock for $50,000 as a short-term investment. Which of the following related to the purchase will be found in Company A's Statement of Cash Flows?

1 point

Financing Activities: $50,000, cash inflow

Operating Activities: $50,000, cash outflow

Financing Activities: $50,000, cash outflow

Investing Activities: $50,000, cash outflow

10.

Question 10

The beginning balance in Inventory on Company A's Year 2 Balance Sheet is $20,000. The company purchased inventory for $200,000 during Year 2, sold inventory with book value of $105,000 for $145,000. What is the ending balance in Inventory on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$75,000

$95,000

$260,000

$115,000

11.

Question 11

The net increase in Prepaid Expenses (Prepaid) amounts to $30,000 and the net decrease in Accounts Payable (AP) is $20,000. What is the net effect of Prepaid and AP on the adjustments to Net Income if the indirect method is used in the Statement of Cash Flows?

1 point

Plus $10,000

Minus $50,000

Plus $50,000

Minus $10,000

12.

Question 12

The beginning balance in Loan Payable on Company A's Year 2 Balance Sheet is $180,000. The company took out new loans of $200,000 during Year 2, and repaid $40,000 of loans. What is the ending balance in Loan Payable on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$380,000

$340,000

$160,000

$20,000