Solved by a verified expert:Which of the following is an operating activity?a. Payment of a cash dividendb. Sale of equipmentc. Making a loan to another entityd. Payment of interest Which is an example of a cash flow from an investing activity?a. Receipt of cash from the issuance of bonds payableb. Payment of cash to repurchase outstanding capital stockc. Receipt of cash from the sale of equipmentd. Payment of cash to suppliers for inventoryHanover, Inc. purchased land through the issuance of long-term bonds. How is this reported on the statement of cash flows?a. Operating activityb. Significant noncash investing and financing activity that merits disclosurec. Financing outflowd. Investing inflowUnder the indirect method of preparing the statement of cash flows, which of the following is added to net income in the operating activities section?a. Gain on sale of equipmentb. Depreciation expensec. Decrease in accounts payabled. Increase in accounts receivableIn what section of the statement of cash flows will the issuance of bonds payable to acquire a building be reported?a. Cash flows from operating activitiesb. Cash flows from investing activitiesc. Cash flows from financing activitiesd. Noncash investing and financing activitiesWhich of the following items is reported in the operating activities section of a statement of cash flows prepared using the direct method?a. Cash payments to suppliersb. Loss on sale of buildingc. Depreciation expensed. Increase in accounts receivableIn horizontal analysis of a balance sheet, of what amount is each item expressed as a percentage?a. Current year net income amountb. Base-year amountc. Current year stockholders’ equity amountd. Current year total assets amountThe following schedule is a display of what type of analysis? Amount PercentCurrent assets $200,000 25%Property, plant, and equipment 600,000 75%Total assets $800,000 100%a. Trend analysisb. Vertical analysisc. Ratio analysisd. Horizontal analysisCeradyne, Inc. presented the following data for a company:Current liabilities $360Long-term debt 480Common stock 640Retained earnings 520Total liabilities & stockholders’ equity $2,000How would common stock appear on a common size balance sheet using vertical analysis?a. 32.0%b. Cannot be determined from the data givenc. 55.1%d. 75.0% Practice Question 44Use the following financial statement information as of the end of each year to answer this question. 2017 2016Inventory $54,000 $48,000Current assets 81,000 106,000Total assets 392,000 336,000Current liabilities 27,000 36,000Total liabilities 102,000 88,000Total stockholders’ equity 290,000 248,000Preferred stock 10,000 10,000Net sales 784,000 697,000Cost of goods sold 306,000 277,000Net income 34,000 90,000Tax expense 22,000 18,000Interest expense 12,000 12,000Dividends paid to preferred stockholders 2,000 2,000Dividends paid to common shareholders 1,000 1,000Compute the profit margin for 2017.a. 8.4%b. 4.3%c. 11.7%d. 8.9%Answer: