How do you indicate decreasing income in a cash flow statement?

Accounting 211 Spring 2016 Semester Take-Home Quiz #4 Question #1 (2 points) For the following activities, indicate the adjustment to be made, if any, to net income in the operating section of the cash flow statement prepared on the indirect method: (A) Increase net income (C) No adjustment (investing activity). (B) Decrease net income (D) No adjustment (financing activity) _____1. Accounts receivable decreased by $5,000 from last year to this year. _____2. Depreciation was $30,000. _____3. Prepaid Expenses decreased $10,000. _____4. Accounts Payable increased $20,000. _____5. Merchandise inventory decreased by $15,000. _____6. Office furniture increased $8,000. _____7. Sold a building at a gain of $5,000. _____8. Issued a cash dividend. _____9. Amortization of intangible assets was $10,000. _____10. Purchased 100 shares of Google common stock for $15,000. ==================================================================== Question #2 (3 points) The stockholders' equity section of the XYZ Corporation's balance sheet shows these balances in the capital stock accounts: Preferred Stock 5% $100 par cumulative $100,000. Common Stock $1 Par $ 1,000,000. The board of directors made the following dividend declarations and payments: 2013 $0 2014 $120,000 2015 $200,000 Required: Prepare a schedule showing the distribution of the dividends between preferred and common stockholders for all three years. Also indicate the dividend per share as well. Question #3 (5 points): The following information is available for the Aunt Rhea Corporation: Aunt Rhea Corporation Income Statement For the Year Ended December 31, 2015 Service Revenue $ 900,000 Operating Expenses 700,000 Operating Income $ 200,000 Gain on Investment Sale 10,000 Net income Before Income Taxes $ 210,000 Loss on Sale of Investments 25,000 $ 185,000 Income Tax Expense 90,000 Net Income $ 95,000 The following partial balance sheet information is also available for 2015 and 2014: 2015 2014 $ 655,000 $ 435,000 120,000 100,000 Merchandise Inventory 40,000 50,000 Supplies 10,000 20,000 L.T. Investments 35,000 80,000 Accounts Payable 70,000 60,000 Cash Accounts Receivable Income Taxes Payable 10,000 15,000 In addition the following transactions took place during 2015: 1. 2. 3. 4. Common stock was issued for $100,000 cash. Long-term investments were sold for $55,000. Cash dividends of $80,000 were paid. The operating expenses included depreciation of $30,000. Required: Prepare in good form, a cash flow statement for 2015 using the indirect method for Aunt Rhea Corporation