16. Mendes Charters reported the following information atDecember 31, 2015:
Preferred stock, $100 par, 500 shares authorized, andoutstanding;
cumulative; nonparticipating; callable at par value $50,000
Common stock, $12 par, 50,000shares authorized and outstanding 600,000
Additional paid-incapital--Common 25,000
Retained earnings825,000
Mendesâ total contributed capitalis
a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000
17. Which of the following should be considered when a companydecides to declare a cash dividend on common stock?
a. The retained earnings balance only
b. The amount of authorized shares of common stock
c. The book value of the company's stock
d. The cash available and the retained earnings balance
18. The primary reason for a stock split is to
a. distribute cash to the investor.
b. decrease the market value of the stock.
c. decrease the number of shares outstanding.
d. increase the contributed capital of the corporation.
19. Nordic Exports Inc. reported net income of $150,000 for2015, but its cash balance decreased $40,000. Which financialstatement should Nordic Exportsâ management refer to for anexplanation of this situation? a
. Balance Sheet
b. Income Statement
c. Statement of Retained Earnings
d. Statement of Cash Flows
20. The primary purpose of the statement of cash flows is toprovide information about
a. the financial position of the company.
b. the profitability of the company.
c. the investing and financing activities of the company.
d. the cash inflows and outflows of the company.
21. Cash flows from acquiring and disposing of long-term assetsare classified as
a. operating activities.
b. investing activities
. c. financing activities.
d. purchasing activities.
22. Cash flows from borrowing and paying off a 90-day bank loanare classified as
a. operating activities. b. investing activities. c. financingactivities. d. purchasing activities.
23. Cash flows from issuing and repurchasing stock or issuingand repaying (retiring) debt are classified as
a. operating activities. b. investing activities. c. financingactivities. d. borrowing activities.
24. Cash flows from acquiring and selling products areclassified as
a. operating activities. b. investing activities. c. financingactivities. d. distribution activities.
25. Presented below is the operating activities section of thestatement of cash flows for Golden Consulting for 2016:
Operating activities:
Net income $ 92,000
Add: Depreciation 20,000
Decrease in accounts receivable 8,000
__________
$120,000
Deduct: Decrease in accounts payable (6,000)
Net cash inflow from operating activities $114,000
Which method of preparing the operating activities section hasGolden Consulting used?
a. The direct method b. The indirect method c. Either method d.Cannot be determined without further information
