Question

Hello! I have an examination coming up soon
These practic

Which of the following items affecting retained earnings during a period could be reported in the financing activities section of the statement of cash flows? C Cash dividends paid only. Net Income for the period only. Both cash dividends paid and net income for the period. Neither cash dividends paid nor net income for the period. If a loss of $20,000 is incurred in selling (for cash) office equipment that cost $90,000 and had accumulated depreciation of $22,500, then the actual cash proceeds must have been C $47,500 $87,500 $67,500 $70,000. (Ctrl) -

e questions have me confused. Please help! I may know why but need clarification. Sooner the better! thanks in advance.

I know these are simple. Any help would be appreciated

Answer 1

Net income is shown under the operating activities section of the cash flow statement (Indirect method). Dividends paid in cash are shown under the financing activities section of cash flows. Hence, the correct option is: Cash dividends paid only. Book value of equipment = Cost-Accumulated depreciation Book value of equipment = $90,000-$22,500 Book value of equipment = $67,500 Cash proceeds = $67,500-$20,000 Cash proceeds = $47,500 Hence, the correct option is $47,500.