1) Red Co. had the following transactions through December 31: What amount shoul

Question

1) Red Co. had the following transactions through December 31:

What amount should Red report as net cash used by investing activities in its statement of cash flows for the period ended December 31?

Multiple Choice

a) $23,000

b) $35,000

c) $75,000

d) $48,000

2) Conceptually, interim financial statements can be described as emphasizing which of the following?

I. Timeliness

II. Relevance

III. Verifiability

Multiple Choice

a) I and III only.

b) I and II only.

c) II and III only.

d) I only.

Cash proceeds from the sale of investment in Gold Co. stock $ 15,000 Dividends received on investment in Blue Co. stock $ 10,000 Repaid principal on a loan to the bank $ 35,000 Acquired investment in Yellow Co. stock $ 75,000 Proceeds from the disposal of factory equipment $ 12,000

Explanation / Answer

1 Net cash used by investing activities = 75000-15000-12000= 48000 Option D is correct 2 Conceptually, interim financial statements emphasize timeliness Option D is correct

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