6. The purchase of additional shares from the noncontrolling interest of a subsidiary by the
parent results in disclosure in which section of a cash flow statement?
a. operating activities b. financing activities c. investing activities
d. not reflected on the statement of cash flows
7. Dividends paid by a subsidiary have the following affect on the consolidated cash flow
a. all dividends to the parent and to noncontrolling stockholders appear on the statement.
b. only dividends to the parent appear on the statement. c. only dividends to NCI appear on
the statement.
d. neither dividends to the parent or to noncontrolling stockholders appear on the statement
8. Which of the following statements is true?
a. The consolidated statement of cash flows treats the purchase of intercompany bonds
from parties outside the consolidated group as a retirement of consolidated debt, and
includes the cash outflow under cash flows from financing activities.
b. The consolidated statement of cash flows treats the purchase of intercompany bonds
from parties outside the consolidated group as a retirement of consolidated debt, and
includes the cash outflow under cash flows from investing activities.
c. The consolidated statement of cash flows treats the intercompany interest payments and
amortization of premiums and/or discounts on intercompany bonds under operating
activities.
d. The consolidated statement of cash flows treats the intercompany interest payments and
amortization of premiums and/or discounts on intercompany bonds under investing
activities.
9. Assume investments in the stock of firms not included in the consolidated group result
in the nonconsolidated firm reporting income of $200,000 and the firm paid dividends of
