Question 21 1. 21. On January 1, 2006, Lane Corporation had 50,000 shares of $5 par value common stock outstanding. On March 31, 2006, Lane issued an additional 8,000 shares in exchange for a building. What number of shares will be used in the computation of basic EPS for the year 2006? A) 50,000. B) 58,000. C) 56,000. D) 52,000. Question 22 1. 22. Foster Company reports net income of $290,000 for 2006 and declared a cash dividend of $1 per share on each of its 100,000 shares of common stock outstanding. Earnings per share for 2006 is: A) $2.90 per share. B) $1.00 per share. C) $0.90 per share. D) $1.90 per share. Question 23 1. 23. Windsor Corporation's 2006 net income is smaller than net cash flow from operating activities. Which of the following would not be an explanation of why net income is smaller than net cash flow from operating activities? A) Windsor paid dividends to shareholders during 2006. B) Windsor's accounts payable increased during 2006. C) Windsor recognized depreciation expense in 2006. D) Windsor sold equipment at a loss in 2006. Question 24 1. 24. Early in 2006, Platt Corporation purchased marketable securities at a cost of $70,000. In September, dividends of $4,700 were received; Platt sold the securities in December at a gain of $3,500. How would these transactions be reported on Platt's statement of cash flows for 2006? A) $3,500 net cash provided by investing activities; $4,700 included in cash provided by operating activities. B) $8,200 net cash provided by investing activities. C) $78,200 cash provided by investing activities; $70,000 cash used in financing activities. D) $65,300 net cash used in investing activities; $73,500 cash provided by investing activities. Question 25 1. 25. The accountant for Earth Institute, Inc., determined the cash flow for several transactions to be as follows: Payment to pay off notes payable.......................................... $175,000 Proceeds from issuance of bonds payable.............................. 615,000 Payment to purchase equipment............................................ 255,000 Payment of wages................................................................ 95,000 Payment of dividends............................................................ 135,000 On the basis of the above transactions alone, determine the net cash flow from financing activities. A) $255,000 net cash used for financing activities. B) $440,000 net cash provided by financing activities. C) Zero: cash inflows equal cash outflows from financing activities. D) $305,000 net cash provided by financing activities. Question 26 1. 26. All of the following are considered cash equivalents except A) Marketable securities B) Money market funds C) Commercial paper D) Treasury bills Question 27 1. 27. A stock dividend is reported on the A) Financing section of the statement of cash flows B) Balance sheet C) Income statement D) Operating section of the statement of cash flows Question 28 1. 28. Which of the following indicates a cash receipt? A) An increase in inventory. B) A decrease in accrued expenses, such as wages payable. C) A decrease in accounts receivable. D) A decrease in accounts payable.