True & False (20 Points)

Trading securities, as part of current assets, is recorded in balance sheet at cost value.

Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from issuing the stocks.

There are two alternatives methods to reporting cash flows from operating activities in the statement of cash flows: (1) the direct method and (2) the indirect method.

A bond is usually divided into a number of individual bonds of $500 each.

Earnings per share is net income divided by the number of common shares outstanding.

When the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium.

Generally, when earnings are strong, issue bond in exchange of cash is more attractive for common stock investor.

Treasury stock is stock that a corporation has issued and then reacquired.

The ending cash on the statement of cash flows equals the cash reported on the companys balance sheet at the beginning of the year.

The interest rate to be paid on the face amount of the bond is called the contract rate or coupon r