Problem 1: Information concerning the debt of Emig Company is as follows:
Short-term borrowings:
Balance at December 31, 2007 $525,000
Proceeds from borrowings in 2008 325,000
Payments made in 2008 (450,000)
Balance at December 31, 2008 $400,000
Current portion of long-term debt:
Balance at December 31, 2007 $1,625,000
Transfers from caption "Long-Term Debt" 500,000
Payments made in 2008 (1,225,000)
Balance at December 31, 2008 $ 900,000
Long-term debt:
Balance at December 31, 2007 $9,000,000
Proceeds from borrowings in 2008 2,250,000
Transfers to caption "Current Portion of Long-Term Debt" (500,000)
Payments made in 2008 (1,500,000)
Balance at December 31, 2008 $9,250,000
In preparing a statement of cash flows for the year ended December 31, 2008, for Emig Company, cash flows from financing activities would reflect
Inflow Outflow
a. $2,000,000 $2,000,000
b. $2,250,000 $2,250,000
c. $2,650,000 $2,575,000
d. $2,575,000 $3,175,000
Problem 2: In considering interim financial reporting, how did the Accounting Principles Board conclude that such reporting should be viewed?
a. As a "special" type of reporting that need not follow generally accepted accounting principles.
b. As useful only if activity is evenly spread throughout the year so that estimates are unnecessary.
c. As reporting for a basic accounting period.
d. As reporting for an integral part of an annual period.