Question

All of the following would be considered investing activities except:

		purchase of 25% interest in the stock of a supplier.
		sale of land for cash.
		receipt of cash dividends from investments.
		purchase of equipment for cash.

"Dolan Company reports its income from investments under the equity method and recognized income of $25,000 from its investment in Moss Co. during the current year, even though no dividends were declared or paid by Moss during the year. On Dolan's statement of cash flows (indirect method), the $25,000 should"

		not be shown.
		be shown as a deduction from net income in the cash flows from operating activities section.
		be shown as cash inflow from investing activities.
		be shown as cash outflow from financing activities.

Answer 1

1) Answer is Option c.

Receipt of cash dividends from investments would not be considered as an investing activity.

2) Answer is Option b.

In Dolands cash flow the $25000 should be shown as a deduction from net income in the cash flows from operating activities section.

Thank you.