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Credit balances:
Accumulated depreciation 10,000
Accounts payable 5,000
Accrued liabilities (9,000)
Taxes payable (2,000)
Based solely on this information, net cash flow from operating activities under the indirect method on the statement of
cash flows would be:
a. $20,000.
b. $37,000.
c. $12,000.
d. $25,000.
88. Long Company’s net income last year was $43,000 and cash dividends declared and paid to the company stockholders
was $28,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
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Debit balances:
Accounts receivable $(6,000)
Inventory 2,000
Long-term investments 40,000
Credit balances:
Accumulated Depreciation 19,000
Accounts payable 18,000
Accrued liabilities (5,000)
Taxes payable 4,000
Based solely on this information, the net cash flows from operating activities under the indirect method on the statement
of cash flows would be
a. $25,000.
b. $62,000.
c. $83,000.
d. $3,000.
89. Blue Company’s net income last year was $35,000. Changes in selected balance sheet accounts for the year appear
below:
Increases
(Decreases)
Debit balances:
Accounts receivable $(7,000)
Inventory 8,000
Prepaid expenses (6,000)
Credit balances:
Accumulated depreciation 10,000
Accounts payable 13,000
Accrued liabilities (5,000)
Taxes payable 5,000
Based solely on this information, net cash flow from operating activities under the indirect method on the statement of
cash flows would be:
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a. $81,000.
b. $29,000.
c. $45,000.
d. $63,000.
90. The data given below are from the accounting records of Kain Company:
Net Income $40,000
Depreciation expense 8,000
Decrease in accounts payable 1,800
Decrease in merchandise inventory 2,500
Increase in long-term liabilities 10,000
Increase in common stock 25,000
Increase in accounts receivable 4,000
Based on this information, the net cash flows from operating activities on the statement of cash flows using the indirect
method would be
a. $51,300.
b. $50,000.
c. $42,100.
d. $44,700.
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91. The following events occurred last year at Marigold Company:
Purchase of plant & equipment $40,000
Sale of long-term investment 15,000
Stock dividend paid 4,000
Paid off bonds payable 17,000
Depreciation expense 9,000
Based on the information above, net cash flow from investing activities for the year on the statement of cash flows would
be:
a. ($10,000).
b. ($25,000).
c. ($17,000).
d. ($34,000).
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92. The following events occurred last year for the Bronze Company:
Purchase of treasury stock $50,000
Issuance of common stock 90,000
Payment of dividends to common stockholders 10,000
Sale of equipment 17,000
Considering only the above transactions, the net cash flow from financing activities on the statement of cash flows was:
a. $25,000.
b. $30,000.
c. $76,000.
d. $43,000.
93. Last year Kinslow Company’s cash account increased by $16,000. Net cash flows from investing activities were
$(39,000). Net cash flows from financing activities were $17,000. On the statement of cash flows, the net cash flows from
operating activities were
a. $(22,000).
b. $38,000.
c. $(6,000).
d. $16,000.
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94. Last year, Uranium Company’s cash account increased by $20,000. Net cash flow from investing activities were
($35,000). Net cash flow from financing activities were $3,000. On the statement of cash flows, net cash flow from
operating activities were:
a. $38,000.
b. ($15,000).
c. $52,000.
d. ($32,000).
95. Last year, Amethyst Company’s cash account decreased by $20,000. Net cash flow from investing activities were
$23,000. Net cash flow from financing activities were ($12,000). On the statement of cash flows, net cash flow from
operating activities were:
a. ($31,000).
b. ($23,000).
c. ($18,000).
d. ($47,000).
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96. Stillwater Inc. reported the following information for Year 1 and Year 2:
Year 1 Year 2
Accounts receivable $51,000 $57,000
Inventories 42,000 39,000
Accounts payable 43,000 48,000
Net income 49,000
Depreciation Expense 8,000
If Stillwater Inc. uses the indirect method to prepare the operating activities section of the statement of cash flows, what
amount will be reported as net cash flows from operating activities for Year 2?
a. $49,000
b. $55,000
c. $57,000
d. $59,000
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97. Advance Systems Inc. reported the following information for Year 1 and Year 2:
Year 1 Year 2
Accounts receivable $101,000 $93,000
Prepaid expenses 5,000 6,000
Accounts payable 71,000 76,000
Salaries payable 5,000 4,000
Net income 67,000
Loss on sale of equipment 5,000
Depreciation expense 11,000
If Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows,
what amount will be reported as net cash flows from operating activities for Year 2?
a. $72,000
b. $78,000
c. $94,000
d. $98,000
98. Emerald Inc. reported the following information for Year 1 and Year 2:
Year 1 Year 2
Cash $ 20,000 $ 29,000
Noncash current assets 150,000 162,000
Cash flows from financing activities 250,000
Cash flows from operating activities 60,000
Which of the following is the amount of net cash flow from investing activities for Year 2?
a. Cash inflow of $300,000
b. Cash outflow of $250,000
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c. Cash inflow of 45,000
d. Cash outflow of $301,000
99. Accounts receivable arising from sales to customers amounted to $80,000 and $65,000 at the beginning and end of the
year respectively. Net income reported on the income statement for the year was $150,000. Exclusive of the effect of
other adjustments, the cash inflows from operating activities to be reported on the statement of cash flows are:
a. $259,000.
b. $120,000.
c. $200,000.
d. $165,000.
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100. Saphire Unlimited Company reported net income of $60,000 for the year. During the year, accounts receivable
decreased by $6,000, accounts payable increased by $3,000, depreciation expense of $5,000 was recorded, and there was a
gain $1,000 on the sale of long-term investments. Using the indirect method, net cash flow from operating activities for
the year is:
a. $73,000.
b. $60,000.
c. $40,500.
d. $81,500.
101. A company had net income of $230,000. Depreciation expense is $26,000. During the year accounts receivable and
inventory increased $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased $2,000 and
$4,000, respectively. There was also a loss on the sale of equipment of $3,000. Using the indirect method, what is the
amount of net cash flows from operating activities on the statement of cash flows?
a. $196,000
b. $202,000
c. $276,000
d. $288,000
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102. Net income reported on the income statement for the current year was $350,000. Depreciation recorded on plant
assets was $26,000. Accounts receivable and inventories increased by $3,000 and $5,000 respectively. Prepaid expenses
and accounts payable decreased by $2,500 and $13,000 respectively. Using the indirect method, how much would be
reported as net cash flow from operating activities on the statement of cash flows?
a. $120,000
b. $234,000
c. $357,500
d. $300,000
103. Net income reported on the income statement for the current year was $300,000. Depreciation recorded on plant
assets was $40,000. Accounts receivable and inventories decreased by $8,000 and $7,500 respectively. Prepaid expenses
and accounts payable increased by $200 and $3,000 respectively. Using the indirect method, how much would be reported
as net cash flow from operating activities on the statement of cash flows?
a. $100,200
b. $358,300
c. $400,670
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d. $512,700
104. If a gain of $25,000 is incurred in selling (for cash) office equipment having a book value of $100,000, the total
amount reported in the cash flows from the investing activities section of the statement of cash flows is
a. $75,000.
b. $100,000.
c. $125,000.
d. $25,000.
105. If a loss of $12,500 is incurred in selling (for cash) office equipment having a book value of $50,000, the total
amount reported in the cash flows from investing activities section of the statement of cash flows is
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a. $37,500.
b. $50,000.
c. $62,500.
d. $12,500.
106. Land costing $78,000 was sold for $93,000 cash. The gain on the sale was reported on the income statement as other
income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?
a. $78,000
b. $108,000
c. $93,000
d. $15,000
107. The following transactions were made by Ruby Inc. last year:
Issuance of common stock $100,000
Dividends paid to the company’s stockholders 2,000
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Depreciation expense 6,000
Repayment of principal on bonds 40,000
Proceeds from sale of the company’s used equipment 39,000
Purchase of land 230,000
Based solely on the above information, net cash flow from financing activities for the year on the statement of cash flows
would be:
a. $58,000.
b. ($150,000).
c. ($67,000).
d. $29,000.
108. The following transactions occurred last year at Berry Inc. last year:
Issuance of common stock $170,000
Dividends paid to the common stockholders 9,000
Depreciation expense 6,000
Repayment of principal on the company’s own bonds 65,000
Sale of equipment 12,000
Purchase of a building 130,000
Based solely on the above information, net cash flow from financing activities for the year on the statement of cash flows
would be:
a. $31,000.
b. $59,000.
c. $96,000.
d. $79,000.
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109. The following transactions occurred last year at Dempsey Inc.
Issuance of common stock $ 50,000
Dividends paid to common stockholders 3,000
Depreciation expense 6,000
Repayment of principal on the company’s own bonds 40,000
Sale of equipment 17,000
Purchase of land 120,000
Based solely on the above information, the net cash flows from financing activities for the year on the statement of cash
flows would be
a. $249,000.
b. $7,000.
c. $(103,000).
d. $(6,000).
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110. The Laurel Company reported the following data for last year:
Decrease in the Cash account $25,000
Net cash provided by operating activities 20,000
Net cash provided by investing activities 15,000
Based solely on this information, the net cash flows from financing activities on the statement of cash flows would be
a. $2,000.
b. $(30,000).
c. $(60,000).
d. $(8,000).
111. Master Company’s net income last year was $88,000 and cash dividends declared and paid to the company
stockholders was $60,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Debit balances:
Cash $ (4,000)
Accounts receivable (11,000)
Inventory 6,000
Prepaid expenses 0
Long-term investments 50,000
Plant and equipment 35,000
Credit balances:
Accumulated depreciation 62,000
Accounts payable 1,000
Accrued liabilities (5,000)
Taxes payable 10,000
Bonds payable (60,000)
Common stock 40,000
Retained earnings 28,000
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The net cash flows from operating activities last year was
a. $181,000.
b. $150,000.
c. $88,000.
d. $161,000.
112. Master Company’s net income last year was $88,000 and cash dividends declared and paid to the company
stockholders was $60,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Debit balances:
Cash $ (4,000)
Accounts receivable (11,000)
Inventory 6,000
Prepaid expenses 0
Long-term investments 50,000
Plant and equipment 35,000
Credit balances:
Accumulated depreciation 62,000
Accounts payable 1,000
Accrued liabilities (5,000)
Taxes payable 10,000
Bonds payable (60,000)
Common stock 40,000
Retained earnings 28,000
The net cash flows from investing activities last year was
a. $45,000.
b. $(45,000).
c. $85,000.
d. $(85,000).
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113. Chandler Company’s net income last year was $98,000 and cash dividends declared and paid to the company
stockholders was $13,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Debit balances:
Cash $ (3,000)
Accounts receivable 1,000
Inventory (1,000)
Prepaid expenses 13,000
Long-term investments 70,000
Plant and equipment 45,000
Credit balances:
Accumulated depreciation 61,000
Accounts payable (11,000)
Accrued liabilities (9,000)
Taxes payable 9,000
Bonds payable (50,000)
Common stock 40,000
Retained earnings 85,000
The net cash flows from operating activities to be reported in a statement of cash flows is
a. $135,000.
b. $98,000.
c. $159,000.
d. $74,000.
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114. Master Company’s net income last year was $88,000 and cash dividends declared and paid to the company
stockholders was $60,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Debit balances:
Cash $ (4,000)
Accounts receivable (11,000)
Inventory 6,000
Prepaid expenses 0
Long-term investments 50,000
Plant and equipment 35,000
Credit balances:
Accumulated depreciation 62,000
Accounts payable 1,000
Accrued liabilities (5,000)
Taxes payable 10,000
Bonds payable (60,000)
Common stock 40,000
Retained earnings 28,000
The net cash flows from financing activities last year was
a. $80,000.
b. $(80,000).
c. $20,000.
d. $(20,000).
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115. Chandler Company’s net income last year was $98,000 and cash dividends declared and paid to the company
stockholders was $13,000. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Debit balances:
Cash $ (3,000)
Accounts receivable 1,000
Inventory (1,000)
Prepaid expenses 13,000
Long-term investments 70,000
Plant and equipment 45,000
Credit balances:
Accumulated depreciation 61,000
Accounts payable (11,000)
Accrued liabilities (9,000)
Taxes payable 9,000
Bonds payable (50,000)
Common stock 40,000
Retained earnings 85,000
The net cash flows from investing activities to be reported in a statement of cash flows is
a. $(75,000).
b. $75,000.
c. $(115,000).
d. $115,000.