1. Which item would not appear in the investing activities section of the statement of cash flows?

• Cash inflow from the sale of land.
• Cash outflow from the purchase of equipment.
• Cash inflow from the Issue of common stock.
• All of the answers identify items that would appear In the Investing activities section of the statement of cash flows.

2. When using the indirect method. which of Me following items should be added to the amount of net Income when determining the amount of net cash flow from operating activities?

• The amount of an Increase in the balance of a Land account.
• The amount of a decrease In the balance of a Prepaid Rent account.
• The amount of an increase in the balance of the Accounts Receivable account.
• The amount of a decrease in the balance of the other Operating Expenses Payable account.

On January 1, 2016, DIBA Company had a balance of $450.000 in its Bonds Payable account. During 2016, DIBA issued bonds with a $200,000 face value. There was no premium or discount associated with the bond issue. The balance in the Bonds Payable account on December 31. 2016. was $400,000.

Required

a. Determine the cash outflow for the repayment of bond liabilities assuming that the bonds were retired at face value.

Cash outflow for repayment of bond liabilities $250.000

b. Prepare the financing activities section of the 2016 statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.)

Cash flows from financing activities:

Proceeds from issue of bonds payable 200,000

Repayment of bonds payable $ (250,000)

Net cash flow from financing activities $ (50,000)

Answer rating: 100% (QA)

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