Cash flows from investing activities are as follows:

Cash inflows

From the sale of property, plant, equipment, and investments 

From the collection of long term notes receivable

Cash outflows

To purchase property, plant, equipment, and investments

For loans made to borrowers

Therefore, the correct answer is A.

A Comprehensive income is all changes in the shareholders’ equity from all sources except owners’ investments and dividends.Comprehensive income components are as follows:14 • Unrealized gains or losses • Foreign-currency translation adjustments • Gains (losses) from post-retirement benefit plans • Deferred gains (losses) derivatives. The correct answer is A.

Preferred share is a special share that provides its owner some advantages more than a common share does.

Bonds not backed by collateral are called “unsecured bonds” (also called debenture bonds). The correct answer is E.

Straight-line depreciation method allocates the depreciable cost of the asset equally to its useful life.

Double-declining balance depreciation method produces a decreasing annual depreciation expense over the asset’s useful life. The statements in the options I and II are not correct. “Cost of the asset – Accumulated Depreciation” is called the “Book Value” of the asset. Units-of-production depreciation method depreciates by units rather than by years. As can also be understood from the information given, the correct answer is C.

Usually, the dividend rate on preferred shares is expressed as a percentage of preferred share par value (such as 5%) on the certificate.

The preferred dividend is calculated as follow: The preferred dividend = Outstanding preferred shares x Par value x Preferred dividend rate

50,000 x 10 x 5% = 25,000 TL

Retained earnings represents the amount earned through profitable operations of a corporation and that is kept in the corporation. In other words, it is the earned amount which is not distributed to the shareholders as dividends.

All expenditures made to acquire land and ready it for intended use are considered as the part of the land cost. The cost of the land includes the following items:

• purchase price
• brokerage commission
• survey and legal fees
• property taxes in arrears
• taxes assessed to transfer the ownership on the land
• cost of clearing the land and removing unwanted buildings

As can also understood from the list given, the correct answer is E. The cost of the land includes all the items in the options.

Preemption:Shareholders have the right to maintain their proportionate ownership in corporations. 


Bonds issued at premium means, market interest rate is less than the stated interest rate of the bond issued. 

Face value is also called as the par value, principal amount or maturity value of the bonds.

Star company's total liabilities of the entity are 250.000 TL'dir. This total liabilities are consist of unearned revenue of 100.000 TL, Salaries payable of 150.000. 

Bonds issued at premium means, market interest rate is less than the stated interest rate of the bond issued. In other words, since the stated interest rate is more than the interest rate offered by any other investment instrument in the market, investors will pay more than the face value of the bond.

Most common types of entities are sole proprietorships, partnerships, and corporations.

Two different methods can be used for reporting operating cash flows. These are;

• Indirect Method
• Direct Method

Indirect or direct methods are only used in the operating cash flows section. These methods use different computations but produce the same amount of cash from operating activities.

Bonds issued in the name of the owner are called registered bonds, bonds not issued in the name of the owner are called bearer (coupon) bonds. Bonds which pay interest from the profit of issuing company are called “income bonds”, bonds which pay interest from specified revenue sources are called “revenue bonds”. Bond issues that mature on a single date are called term bonds, bond issues that mature in installments are called serial bonds. The correct answer is D.

Cash flows statement takes into account the transactions that require cash, related to the activities whether or not they provide income.Income statement takes into account expenses or revenues whether or not they create cash movements. The correct answer is A.

The preferred dividend = Outstanding preferred shares x Par value x Preferred dividend rate

77,000 x 12 x 13% = 120,120 TL

Customers may make advanced payments for the goods or services they will receive in the future. When the company receives an advanced payment, an obligation occurs for delivering the goods or rendering the service for which the customer has made payment. Therefore, company must record a liability in its financial statements and this liability is named unearned revenue. In this context, unearned revenues can be defined as the payments received in advance for the products or services being provided. The correct answer is C.

In order to measure the depreciation, three elements must be known;

The cost of the long-lived asset - The estimated residual value of the long lived asset - The estimated useful life of the long-lived asset