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27) Martin Company is preparing its statement of cash flows using the indirect method. During the year, they sold equipment for $5,990 cash. The net book value of the asset prior to sale was $5,550. Which of the foll ring statements is true? A) The cash receipt of $5,990 would be shown as a positive cash flow in the investing activities B) The gain on sale of $440 would be shown as a positive cash flow in the financing activities C) The gain on sale of $440 would be added back to net income in the operating activities D) The book value of the assets sold would be shown as a negative cash flow in the investing section. section. section. activities section. 13) The vertical analysis statement of Nobell Inc. is as below: Nobell Inc. Comparative Income Statement years Ended Dec 31, 2015 and 2014 (In millions) Net Sales Cost of Goods Sold Gross Profit Operating Expenses: Selling Expenses Administrative expenses Total Expenses Operating Income Other Revenues and (Expenses): Interest Revenue Interest Expense Total Other Revenues and (Expenses) Income Before Taxes 2016 S6,355 3,370 Percent of Total2015 Percent of Tota 100.0% 53.0 47.0 S4,920 1 00.0% 44.7 55.3 $2,720 $675 $410 $1,085 $1,900 10.6 6.5 17.1 29.9 $580 425 $1,005 $1,715 11.8 8.6 20.4 34.9 0.0 14.1 400 (400) $1,500 230 S1,270 6.3 23.6 3.6 20.0 (6.3)(695 695 $1,020 210 $810 20.7 4.3 16.5 Income Tax Expense Net Income The figure 16.5% shown for net income in 2015 signifies that A) net income is equal to 16.5 times of the income before income tax B) net income is 16.5% of gross profit. C) net income is increased by 16.5% over the previous year. D) net income is 16.5% of net sales revenues

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