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| Ramco
Company had the following transactions during the fiscal year ended December
31, 2005: |
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| * Accounts receivable decreased from $220,000
on December 31, 2004 to $200,000 on December 31, 2005. |
| * Royce's board of directors declared
dividends on December 31, 2005 of $.07 per share on the 2.6 million |
| shares outstanding, payable to
shareholders of record on January 31, 2006. The company did not declare or |
| pay dividends for fiscal 2004. |
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| * Sold a truck with a net book value of
$6,000 for $4,500 cash, reporting a loss of $3,000. |
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| * Paid interest to bondholders of $580,000. |
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| * The cash balance was $115,000 on December
31, 2004 and $274,000 on December 31, 2005. |
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| Ramco
Company uses the direct method to prepare its statement of cash flows at
December 31, 2005. The interest |
| paid
to bondholders is reported in the |
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| A.
Financing section, as a use or outflow of cash |
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| B.
Debt section, as a use or outflow of cash. |
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| C.
Investing section, as a use or outflow of cash. |
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| D.
Operating section, as a use or outflow of cash |
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