QUESTION 41

The Sonesta Company sold equipment for cash. The income statement shows a gain on sale of $800. The net book value of the asset prior to sale was $4,000. Which of the following statements describes the cash effect of the transaction?

		Negative cash flow of $4,800 in investing activities
		Negative cash flow of $3,200 in operating activities
		Positive cash flow of $4,800 in investing activities
		Negative cash flow of $800 in financing activities

3 points

QUESTION 42

Which of the following are the three major categories included on the statement of cash flows?

		Investing, operating and financing activities
		Investing, capital and financing activities
		Investing, operating and contracting activities
		Financial, operating and internal control activities

3 points

QUESTION 43

Avatar Company uses the indirect method to prepare its statement of cash flows. Refer to the following information:

Repayments on long-term notes payable: $40,000

New borrowing on long-term notes payable: $34,000

Which of the following statements is accurate regarding the statement of cash flows?

		$34,000 will be shown as a positive cash flow in the investing section.
		$40,000 will be shown as a positive cash flow in the financing section.
		$34,000 will be shown as a positive cash flow in the financing section.
		$40,000 will be shown as a negative cash flow in the investing section.

3 points

QUESTION 44

If bonds with a face value of $100,000 are sold at 88, the amount of cash proceeds is:

		$108,800.
		$100,000.
		$88,000.
		$99,912.

3 points

QUESTION 45

On January 2, 2014, Mahoney Sales issued $10,000 in bonds for $9,400. They were 5-year bonds with a stated rate of 4%, and pay semiannual interest payments. Mahoney Sales uses the straight-line method to amortize the bond discount. On June 30, 2014, when Mahoney makes the first payment to bondholders, how much will they report as interest expense?

		$200
		$260
		$60
		$400