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USE THE FOLLOWING DATA SET TO ANSWER QUESTION #44. #45 and 146 Saddleback Manufacturing Ltd. purchased 5,000 shares of its own previously issued S10 par value common stock for 595,000. Answer the following questions: 44. The 5,000 shares purchased by Saddleback of its own stock would be classified as: A) Common Stock B) Treasury Stock C) Preferred Stock 45. The correct entry to record the purchase of these 5,000 shares is: A) a debit Treasury Stock $95,000 and a credit to Common Stock $95.000 B) a debit to Treasury Stock $50,000 and a credit to Cash $50,000 C) a debit to Treasury Stock $95,000 and a credit to Cash $95.000 D) a debit Treasury Stock $50,000 and a credit to Common Stock $50,000 46. These 5,000 shares would be considered: A) Authorized, Issued and Outstanding B) Authorized and Issued but not outstanding C) Only Authorized until they are resold 47. The PRIMARY purpose of the statement of cash flows is to: A) facilitate banking relationships. B) provide information about the investing and financing activities during a period, C) prove that revenues exceed expenses if there is a net income. D) provide information about the cash receipts and cash payments during a period. 48. True or False: U.S. GAAP recognizes two methods of preparation of the statement of cash flows the direct method and the indirect method. A) True B) False [12]

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