Page 2 SECTION A A statement of cash flows is generated to show which of the following? (A) The revenues the company has earned. (B) The expenses the company incurred during the time period. (C) The inflow and outflow of cash during the time period. (D) How profits were generated. (2 marks) Which of the following describes the financing activities as shown in the statement of cash flows? (A) Includes increases and decreases in long-term assets (B) Includes transactions affecting the capitalization of the business (C) Includes transactions that primarily impact current assets and current liabilities (D) Shows the beginning and ending balance of cash (2 marks) Batra Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement: $240,000 1,000 4,000 $245,000 Sales revenue Interest revenue Gain on sale of plant assets Total revenues and gains Cost of goods sold Salary expense Depreciation expense Other operating expenses Interest expense Income tax expense Total expenses Net income (loss) 110,000 45,000 12,000 23,000 1,000 5,000 $196,000 $49,000 Other information provided: Current assets other than cash increase by $24,000. Current liabilities decrease by $1,000. How much is the Net cash flow provided by operations? (A) $20,000 positive (B) $75,000 positive (C) $32,000 positive (D) $82,000 positive (2 marks) Which of the following costs related to a company truck would NOT be expensed? (A) The cost to change car's oil (B) The cost to install an engine with higher horsepower (C) The cost to replace a broken windshield (D) The cost of new tires (2 marks) Which of the following depreciation methods writes off more depreciation near the start of an asset's later years? (A) Double-declining balance (B) Units-of production