QUESTION 47

Avatar Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for the year 2014.

Net cash flows from operating activities: $32,000 positive

Net cash flows from investing activities: $38,000 negative

Net cash flows from financing activities: $9,000 positive

Which of the following statements is TRUE?

		The statement of cash flows will show an ending cash balance of $3,000.
		The statement of cash flows will show total net cash flows of $70,000 positive.
		The statement of cash flows will show total net cash flows of $3,000 negative.
		The statement of cash flows will show total net cash flows of $3,000 positive.

3 points

QUESTION 48

Chaney Corporation issued 20,000 shares of common stock on January 1, 2014. The stock has par value of $1.00 per share and was sold at $30 per share. The journal entry for this transaction would:

		credit Cash $600,000, debit Common stock $20,000, and debit Paid-in capital $580,000.
		debit Cash $600,000 and credit Paid-in capital $600,000.
		debit Cash $600,000, credit Common stock $20,000, and credit Paid-in capital $580,000.
		debit Cash $600,000 and credit Common stock $600,000.

3 points

QUESTION 49

The Sonesta Company sold equipment for cash. The income statement shows a loss on sale of $5,000. The net book value of the asset prior to sale was $24,000. Which of the following statements describes the cash effect of the transaction?

		Positive cash flow of $29,000 in investing activities
		Negative cash flow of $19,000 in operating activities
		Positive cash flow of $19,000 in investing activities
		Negative cash flow of $14,000 in financing activities

3 points

QUESTION 50

Which of the following correctly describes the unearned revenue account?

		The unearned revenue account represents revenue that has been collected, but not yet earned.
		The unearned revenue account represents revenue that has been earned and collected.
		The unearned revenue account represents revenue that has been earned, but not yet collected.
		The unearned revenue account represents revenue that has neither been earned nor collected.