1. A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on the sale of equipment of $2,000. How much cash was provided by operating activities?<\/p>\n
2. The following data are available for Two-off Company.<\/p>\n
Increase in accounts payable$120,000<\/p>\n
Increase in bonds payable 300,000<\/p>\n
Sale of investments150,000<\/p>\n
Issuance of common stock 160,000<\/p>\n
Payment of cash dividends 90,000<\/p>\n
Net cash provided by financing activities is:<\/p>\n
3. Investing activities include (Points : 1) collecting cash on loans made.<\/p>\n
obtaining cash from creditors.<\/p>\n
obtaining capital from owners.<\/p>\n
repaying money previously borrowed<\/p>\n
4. The cash effects of transactions that create revenues and expenses are financing activities.<\/p>\n
investing activities.<\/p>\n
operating activities.<\/p>\n
processing activities.<\/p>\n
5. If a gain of $12,000 is incurred in selling (for cash) office equipment having a book value of $110,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is <\/p>\n
6.If a company has both an inflow and outflow of cash related to property, plant, and equipment, the <\/p>\n
two cash effects can be netted and presented as one item in the investing activities section.<\/p>\n
cash inflow and cash outflow should be reported separately in the investing activities section.<\/p>\n
two cash effects can be netted and presented as one item in the financing activities section.<\/p>\n
cash inflow and cash outflow should be reported separately in the financing activities section.<\/p>\n
7. Ale Company reports a $16,000 increase in inventory and a $8,000 increase in accounts payable during the year. Cost of Goods Sold for the year was $150,000. The cash payments made to suppliers were (Points : 1) $150,000<\/p>\n
$158,000<\/p>\n
$126,000<\/p>\n
$174,000<\/p>\n
8. Which of the following would be subtracted from net income using the indirect method? (Points : 1) Depreciation expense<\/p>\n
An increase in accounts receivable<\/p>\n
An increase in accounts payable<\/p>\n
A decrease in prepaid expenses<\/p>\n
9. Lending money and collecting the loans are (Points : 1) operating activities.<\/p>\n
investing activities.<\/p>\n
financing activities.<\/p>\n
Non-cash investing and financing activities.<\/p>\n
10. The acquisition of land by issuing common stock is (Points : 1) a noncash transaction which is not reported in the body of a statement of cash flows.<\/p>\n
a cash transaction and would be reported in the body of a statement of cash flows.<\/p>\n
a noncash transaction and would be reported in the body of a statement of cash flows.<\/p>\n
only reported if the statement of cash flows is prepared using the direct method.<\/p>\n
11. <\/b> Kanet Company issued common stock for proceeds of $386,000 during 2014. The company paid dividends of $80,000 and issued a long-term note payable for $95,000 in exchange for equipment during the year. The company also purchased treasury stock that had a cost of $15,000. The financing section of the statement of cash flows will report net cash inflows of (Points : 1) $291,000.<\/p>\n
$481,000.<\/p>\n
$306,000.<\/p>\n
$371,000<\/p>\n
12. <\/b> Adama Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities (Points : 1) used net cash of $17,000.<\/p>\n
used net cash of $29,000.<\/p>\n
provided net cash of $24,000.<\/p>\n
provided net cash of $21,000.<\/p>\n
Question 13.
\n13. <\/b> Pare Company reported a net loss of $30,000 for the year ended December 31, 2014. During the year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. During 2014, operating activities (Points : 1) used net cash of $10,000.<\/p>\n
used net cash of $25,000.<\/p>\n
provided net cash of $25,000.<\/p>\n
provided net cash of $10,000.<\/p>\n
Question 14.
\n14. <\/b> Jean’s Vegetable Market had the following transactions during 2014:<\/p>\n
1. Issued $50,000 of par value common stock for cash.<\/p>\n
2. Repaid a 6 year note payable in the amount of $22,000. <\/p>\n
3. Acquired land by issuing common stock of par value $50,000.<\/p>\n
4. Declared and paid a cash dividend of $7,000. <\/p>\n
5. Sold a long-term investment (cost $3,000) for cash of $6,000. <\/p>\n
6. Acquired an investment in IBM stock for cash of $10,000. <\/p>\n
What is the net cash provided by financing activities? (Points : 1)<\/p>\n
$21,000<\/p>\n
$28,000<\/p>\n
$67,000<\/p>\n
$0<\/p>\n
Question 15.
\n15. <\/b> Vision Company purchased treasury stock with a cost of $16,000 during 2014. During the year, the company paid dividends of $20,000 and issued bonds payable for proceeds of $860,000. Cash flows from financing activities for 2014 total (Points : 1) $840,000 net cash inflow.<\/p>\n
$856,000 net cash inflow.<\/p>\n
$860,000 net cash outflow.<\/p>\n
$824,000 net cash inflow.<\/p>\n
Question 16.
\n16. <\/b> In Jude Company, land decreased $150,000 because of a cash sale for $150,000, the equipment account increased $60,000 as a result of a cash purchase, and Bonds Payable increased $120,000 from issuance for cash at face value. The net cash provided by investing activities is (Points : 1) $150,000.<\/p>\n
$210,000.<\/p>\n
$90,000.<\/p>\n
$270,000.<\/p>\n
Question 17.
\n17. <\/b> Accounts receivable arising from sales to customers amounted to $86,000 and $77,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $290,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is (Points : 1) $290,000.<\/p>\n
$299,000.<\/p>\n
$213,000.<\/p>\n
$280,000.<\/p>\n
Question 18.
\n18. <\/b> In the Papyrus Corporation, cash receipts from customers were $136,000, cash payments for operating expenses were $102,000, and one-third of the company’s $9,300 income taxes were paid during the year. Net cash provided by operating activities is: (Points : 1) $34,000<\/p>\n
$24,700<\/p>\n
$30,800<\/p>\n
$27,800<\/p>\n
Question 19.
\n19. <\/b> If a company reports a net loss, it (Points : 1) may still have a net increase in cash.<\/p>\n
will not be able to pay cash dividends.<\/p>\n
will not be able to get a loan.<\/p>\n
will not be able to make capital expenditures.<\/p>\n
Question 20.
\n20. <\/b> In Ramon Company, Treasury Stock increased $20,000 from a cash purchase, and Retained Earnings increased $80,000 as a result of net income of $120,000 and cash dividends paid of $40,000. Net cash used by financing activities is: (Points : 1) $20,000<\/p>\n
$40,000<\/p>\n
$120,000<\/p>\n
$60,000<\/p>\n","protected":false},"excerpt":{"rendered":"
1. A company had net income of $210,000. Depreciation expense is $27,000. During the year, Accounts Receivable and Inventory increased $17,000 and $42,000, respectively. Prepaid Expenses and Accounts Payable decreased $5,000 and $6,000, respectively. There was also a loss on Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49394","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=49394"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49394\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=49394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=49394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=49394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}