106) Sammy’s Pizza had the following financial information for the year as follows ($ in millions):
Net income
$
9,200
Obtain loan from the bank
4,600
Depreciation expense
1,800
Purchase equipment
5,400
Increase in accounts receivable
3,900
Pay dividends
2,200
Increase in salaries payable
1,700
Sale of land
3,500
Sammy’s Pizza would report net cash inflows (outflows) from investing activities in the amount of:
A) $(800).
B) $2,400.
C) $(1,900).
D) $1,300.
107) Sammy’s Pizza had the following financial information for the year as follows ($ in millions):
Net income
$
9,200
Obtain loan from the bank
4,600
Depreciation expense
1,800
Purchase equipment
5,400
Increase in accounts receivable
3,900
Pay dividends
2,200
Increase in salaries payable
1,700
Sale of land
3,500
Sammy’s Pizza would report net cash inflows (outflows) from financing activities in the amount
of:
A) $(7,600).
B) $5,900.
C) $(1,900).
D) $2,400.
108) Bad Brad’s BBQ had cash flows for the year as follows ($ in millions):
CASH RECEIVED FROM:
Customers
$
1,800
Interest on investments
200
Sale of land
100
Sale of common stock
600
Issuance of debt securities
2,000
CASH PAID FOR:
Interest on debt
$
300
Income tax
80
Debt principal reduction
1,500
Purchase of equipment
4,000
Purchase of inventory
1,000
Dividends on common stock
200
Operating expenses
500
Bad Brad’s would report net cash inflows (outflows) from operating activities in the amount of:
A) ($80).
B) $120.
C) $200.
D) $420.
Customers
$
Interest on investments
Interest on debt
Income tax
Purchase of inventory
(1,000
Operating expenses
Net cash inflows from operating activities
$
109) Bad Brad’s BBQ had cash flows for the year as follows ($ in millions):
CASH RECEIVED FROM:
Customers
$
1,800
Interest on investments
200
Sale of land
100
Sale of common stock
600
Issuance of debt securities
2,000
CASH PAID FOR:
Interest on debt
$
300
Income tax
80
Debt principal reduction
1,500
Purchase of equipment
4,000
Purchase of inventory
1,000
Dividends on common stock
200
Operating expenses
500
Bad Brad’s would report net cash inflows (outflows) from investing activities in the amount of:
A) ($4,000).
B) $100.
C) ($3,900).
D) ($1,900).
Sale of land
$
Purchase of equipment
(4,000
Net cash outflows from investing activities
$
(3,900
110) Bad Brad’s BBQ had cash flows for the year as follows ($ in millions):
CASH RECEIVED FROM:
Customers
$
1,800
Interest on investments
200
Sale of land
100
Sale of common stock
600
Issuance of debt securities
2,000
CASH PAID FOR:
Interest on debt
$
300
Income tax
80
Debt principal reduction
1,500
Purchase of equipment
4,000
Purchase of inventory
1,000
Dividends on common stock
200
Operating expenses
500
Bad Brad’s would report net cash inflows (outflows) from financing activities in the amount of:
A) $1,100.
B) ($1,100).
C) $820.
D) $900.
Sale of common stock
$
Issuance of debt securities
Debt principal reduction
(1,500
Dividends on common stock
Net cash inflows from financing activities
$
111) During the year, Next Tec Corp. had the following cash flows: receipt from customers,
$10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000;
payment of dividends, $1,000; payment to workers, $2,000; and payment for machinery, $8,000.
What amount would be reported for net investing cash flows in the statement of cash flows?
A) $5,000.
B) $2,000.
C) $6,000.
D) ($8,000).
112) During the year, Next Tec Corp. had the following cash flows: receipt from customers,
$10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000;
payment of dividends, $1,000; payment to workers, $2,000; and payment for machinery, $8,000.
What amount would be reported for net financing cash flows in the statement of cash flows?
A) $5,000.
B) $2,000.
C) $6,000.
D) ($8,000).
113) A company had the following cash flows for the year:
(a) Purchased inventory, $60,000
(b) Sold goods to customers, $90,000
(c) Received loan from a local bank, $150,000
(d) Purchased land, $180,000
(e) Purchased treasury stock, $40,000
(f) Paid dividends, $10,000
(g) Sold delivery truck, $30,000
What amount would be reported for net investing cash flows in the statement of cash flows?
A) ($150,000).
B) ($180,000).
C) $30,000.
D) ($190,000).
114) A company had the following cash flows for the year:
(a) Purchased land, $60,000
(b) Borrowed from a local bank, $100,000
(c) Paid employee salaries, $50,000
(d) Issued common stock, $75,000
(e) Paid dividends, $20,000
(f) Sold equipment, $40,000
(g) Sold services to customers, $120,000
What amount would be reported for net investing cash flows in the statement of cash flows?
A) ($20,000).
B) $70,000.
C) $155,000.
D) $40,000.
115) Which of the following would be classified as an investing cash flow?
A) Issue bonds.
B) Receive cash in advance from a customer.
C) Sell a piece of equipment below cost.
D) Repurchase the company’s own shares of common stock.
116) A company had the following cash flows for the year:
(a) Purchased land, $60,000
(b) Borrowed from a local bank, $100,000
(c) Paid employee salaries, $50,000
(d) Issued common stock, $75,000
(e) Paid dividends, $20,000
(f) Sold equipment, $40,000
(g) Sold services to customers, $120,000
What amount would be reported for net financing cash flows in the statement of cash flows?
A) $155,000.
B) $70,000.
C) ($20,000).
D) $40,000.
117) Financing activities would include cash paid for:
A) The stock of another company.
B) Dividends to stockholders.
C) The purchase of treasury stock.
D) Both dividends to stockholders and the purchase of treasury stock.
118) Cash received from issuing common stock would be classified in which section of the
Statement of Cash Flows?
A) Operating.
B) Investing.
C) Financing.
D) Not shown in the Statement of Cash Flows.
119) During 2021, Victory Solutions had the following cash flows: (1) received cash of $5,000
billed to a customer in 2020; (2) earned $20,000 of net income; (3) paid interest of $6,000 on a
corporate bond issued; (4) paid dividends of $8,000 to its stockholders; (5) borrowed $40,000 from
a local bank; and (6) purchased its own shares of common stock for $10,000. What is Victory
Solutions’ net cash flows from financing activities for 2021?
A) $40,000.
B) $30,000.
C) $22,000.
D) $16,000.
120) The following information pertains to Alpha Computing at the end of 2021:
Assets
$
970,000
Liabilities
$
560,000
Net Income
$
90,000
Common Stock
$
350,000
Alpha Computing’s Retained Earnings account had a zero balance at the beginning of 2021. What
amount of dividends did the company declare in 2021?
A) $280,000.
B) $150,000.
C) $30,000.
D) $80,000.
121) The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the
beginning and end of the year, respectively. Sales revenues are $800,000, net income is $100,000,
and net cash flows from operating activities are $150,000. What is Computer World’s cash return
on assets?
A) 33.3%.
B) 42.9%.
C) 25.0%.
D) 37.5%.
122) The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the
beginning and end of the year, respectively. Sales revenues are $800,000, net income is $100,000,
and net cash flows from operating activities are $150,000. What is Computer World’s cash flow to
sales?
A) 15.6%.
B) 25.0%.
C) 18.8%.
D) 37.5%.
123) The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the
beginning and end of the year, respectively. Sales revenues are $800,000, net income is $100,000,
and net cash flows from operating activities are $150,000. What is Computer World’s asset
turnover?
A) 2.0 times.
B) 2.3 times.
C) 0.5 times.
D) 1.8 times.
124) The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the
beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the
previous year), net income is $150,000, and net cash flows from operating activities are $175,000.
What is Sound Designs’ cash return on assets?
A) 19.4%.
B) 21.9%.
C) 22.6%.
D) 18.8%.
125) The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the
beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the
previous year), net income is $150,000, and net cash flows from operating activities are $175,000.
What is Sound Designs’ cash flow to sales?
A) 22.6%.
B) 11.7%.
C) 14.6%.
D) 13.0%.
126) The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the
beginning and end of the year, respectively. Sales revenues are $1.5 million ($1.2 million in the
previous year), net income is $150,000, and net cash flows from operating activities are $175,000.
What is Sound Designs’ asset turnover?
A) 2.0 times.
B) 1.7 times.
C) 0.5 times.
D) 1.9 times.
127) The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the
beginning and end of the year, respectively. Sales revenues are $1.1 million ($0.8 million in the
previous year), net income is $40,000, and net cash flows from operating activities are $50,000.
How does Tech Track’s cash return on assets compare to the industry average of 10%?
A) Better.
B) Worse.
C) Same as.
D) Cannot be determined with the data provided.
128) The balance sheet of Tech Track reports total assets of $400,000 and $500,000 at the
beginning and end of the year, respectively. Sales revenues are $1.1 million ($0.8 million in the
previous year), net income is $40,000, and net cash flows from operating activities are $50,000.
How does Tech Track’s cash flow to sales ratio compare to the industry average of 5%?
A) Better.
B) Worse.
C) Same as.
D) Cannot be determined with the data provided.
129) The balance sheet of Tech Track reports total assets of $400,000 and $600,000 at the
beginning and end of the year, respectively. Sales revenue for the year is $1,000,000 ($800,000 in
the previous year), net income is $40,000, and net cash flows from operating activities are
$50,000. How does Tech Track’s asset turnover compare to the industry average of 2.0 times?
A) Better.
B) Worse.
C) Same as.
D) Cannot be determined with the data provided.
130) We can separate cash return on assets into:
A) Cash flow to sales and return on assets.
B) Cash flow to sales and asset turnover.
C) Cash flow to sales and profit margin.
D) Profit margin and asset turnover.
131) Some cash flow ratios are derived by substituting net cash flows from operating activities in
place of:
A) Average total assets.
B) Net income.
C) Average stockholders’ equity.
D) The change in cash.
132) The balance sheet of Technology World reports total assets of $800,000 and $900,000 at the
beginning and end of the year, respectively. The cash return on assets for the year is 20%. What is
Technology World’s net operating cash flows for the year?
A) $4,500,000.
B) $170,000.
C) $4,250,000.
D) $85,000.
133) The balance sheet of Orion Medical Equipment reports total assets of $450,000 and $550,000
at the beginning and end of the year, respectively. The cash return on assets for the year is 10%.
What is Orion’s net operating cash flows for the year?
A) $5,000,000.
B) $55,000.
C) $5,500,000.
D) $50,000.
134) We calculate cash return on assets as
A) The change in cash divided by average total assets.
B) Net cash flows from operating activities divided by average total assets.
C) The change in cash divided by ending total assets.
D) Net cash flows from operating activities divided by ending total assets.
135) Which of the following statements is not true relating to cash flow analysis?
A) Cash return on assets indicates the amount of operating cash flow generated for each dollar
invested in assets.
B) To maximize cash flow from operations, a company strives to increase both cash flow per
dollar of sales and sales per dollar of assets invested.
C) Cash return on assets can be separated to examine two important business strategies: cash flow
to sales and asset turnover.
D) Positive cash flow from operations is not important to a company’s survival in the long run.
136) The balance sheet of Storage Solutions reports total assets of $300,000 and $350,000 at the
beginning and end of the year, respectively. The cash return on assets for the year is 10%. What is
Storage Solutions’ net cash flows from operating activities for the year?
A) $25,000.
B) $30,000.
C) $32,500.
D) $35,000.
137) In 2021, Hope Company incurred sales on account of $100,000. The company also has the
following information:
December 31, 2021
December 31, 2020
Accounts Receivable
$
20,000
$
50,000
Accounts Payable
$
40,000
$
65,000
What is the amount of cash received from customers for Hope Company in 2021?
A) $100,000.
B) $45,000.
C) $130,000.
D) $70,000.
138) Wireless Technologies reports sales of $50 million. Accounts receivable at the beginning and
end of the year are $5 million and $7 million, respectively. What is the amount of cash received
from customers?
A) $50 million.
B) $52 million.
C) $48 million.
D) $55 million.
Sales
= Cash received from customers