If equipment is used by a corporation in its operations and is sold at a loss, under which section on the statement of cash flows is this reported? Mark one answer:
(A)Operating
(B)Investing
(C)Financing
(D)Supplemental
(E)It is not reported on the statement of cash flows.
In the current year, Fitz, a single taxpayer, sustained a $48,000 loss on Code Sec. 1244 stock in JJJ Corp., a qualifying small business corporation, and a $20,000 loss on Code Sec. 1244 stock in MMM Corp., another qualifying small business corporation. What is the maximum amount of loss that Fitz can deduct for the current year?
(A)$50,000 capital loss (B)$68,000 capital loss (C)$18,000 ordinary loss and $50,000 capital loss (D)$50,000 ordinary loss and $18,000 capital loss
Correct Answer: D
Which of the following transactions have a negative impact on cash? Mark one answer:
(A)A decrease in supplies on hand (B)Proceeds from selling equipment used in the business (C)A loss on selling equipment used in the business (D)Dividends declared and paid (E)An increase in income taxes payable
Correct Answer: D
Cartman's Cats has $1,000,000 in assets after purchasing Big Bertha's Birds, along with $500,000 in liabilities. It has 500 shares capital stock outstanding. What is the book value of each share of stock? Mark one answer:
(A)$1,000 (B)$50 (C)$500 (D)$2,000 (E)$500,000
Correct Answer: A
More CPA Exam Questions
- 1When capital is increased in the double-entry method of accounting, the result is: Mark one answer:
- 2If a share of cumulative preferred stock has a call price of $95 and has had four years of dividends of $5 each, what is the book value of that share of stock? Mark one answer:
- 3The statement of cash flow reports are used for the following: (I)Investing activities(I) Financing activities(I)I Operating activities(I) Supplemental activities Mark one answer:
- 4A corporation’s penalty for underpaying federal estimated taxes is
- 5On July 1, Year 5, Eagle Corp. issued 600 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, Year 5 and mature on April 1, Year 15. Interest is payable semiannually on April 1 and October 1. What amount did Eagle receive from the bond issuance?