63) The following events occurred last year for the Cart Corporation:
Issuance of common stock
$52,000
Dividends paid to shareholders
$15,000
Sale of long-term investment
$12,000
Interest paid to a lender
$8,000
Proceeds from sale of used equipment
$34,000
Repurchase of common stock
$13,000
Based solely on the above information, the net cash provided by (used in) financing activities for
the year on the statement of cash flows was:
A) $12,000
B) $24,000
C) $20,000
D) $49,000
Financing activities:
Issuance of common stock
Purchase own shares of common stock
)
Paying a dividend
)
Net cash provided by (used in) financing activities
42
64) Illies Corporation’s comparative balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
$
40,000
$
33,000
19,000
21,000
67,000
69,000
126,000
123,000
358,000
339,000
156,000
132,000
202,000
207,000
$
328,000
$
330,000
$
18,000
$
19,000
54,000
59,000
48,000
42,000
120,000
120,000
82,000
86,000
202,000
206,000
23,000
22,000
103,000
102,000
126,000
124,000
$
328,000
$
330,000
The company did not dispose of any property, plant, and equipment during the year. Its net income
for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds
payable or purchase any of its own common stock during the year. Its net cash provided by (used
in) operating activities and net cash provided by (used in) financing activities are:
A) net cash provided by operating activities, $33,000; net cash used in financing activities,
$(1,000)
B) net cash provided by operating activities, $35,000; net cash used in financing activities,
$(7,000)
C) net cash provided by operating activities, $33,000; net cash used in financing activities,
$(7,000)
D) net cash provided by operating activities, $35,000; net cash used in financing activities,
$(1,000)
65) Birchett Corporation’s most recent balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents
$
27
$
26
Accounts receivable
65
59
Inventory
49
55
Total current assets
141
140
Property, plant, and equipment
533
490
Less accumulated depreciation
234
231
Net property, plant, and equipment
299
259
Total assets
$
440
$
399
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
28
$
26
Total current liabilities
28
26
Bonds payable
169
200
Total liabilities
197
226
Stockholders’ equity:
Common stock
71
70
Retained earnings
172
103
Total stockholders’ equity
243
173
Total liabilities and stockholders’ equity
$
440
$
399
The company’s net income for the year was $91 and it did not sell or retire any property, plant, and
equipment during the year. Cash dividends were $22. The net cash provided by (used in) operating
activities for the year was:
A) $86
B) $5
C) $96
D) $130
66) Norbury Corporation’s net income last year was $34,000. The company did not sell or retire
any property, plant, and equipment last year. Changes in selected balance sheet accounts for the
year appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable
$
12,000
Inventory
$
(9,000
)
Prepaid expenses
$
4,000
Accumulated depreciation
$
19,000
Liability Accounts:
Accounts payable
$
5,000
Accrued liabilities
$
7,000
Income taxes payable
$
(6,000
)
Based solely on this information, the net cash provided by (used in) operating activities under the
indirect method on the statement of cash flows would be:
A) $52,000
B) $66,000
C) $53,000
D) $16,000
Net income
basis:
Depreciation
19,000
Increase in accounts receivable
)
Decrease in inventory
Increase in prepaid expenses
)
Increase in accounts payable
Increase in accrued liabilities
Decrease in income taxes payable
)
activities
67) Swinger Corporation’s comparative balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
$
47,000
$
31,000
23,000
22,000
66,000
64,000
136,000
117,000
356,000
338,000
184,000
161,000
172,000
177,000
$
308,000
$
294,000
$
17,000
$
16,000
43,000
44,000
63,000
61,000
123,000
121,000
83,000
80,000
206,000
201,000
27,000
24,000
75,000
69,000
102,000
93,000
$
308,000
$
294,000
The company did not dispose of any property, plant, and equipment during the year. Its net income
for the year was $10,000. The net cash provided by (used in) operating activities is:
A) $32,000
B) $36,000
C) $34,000
D) $28,000
68) Majorn Auto Parts Store had net income of $81,000 for the year just ended. Majorn collected
the following additional information to prepare its statement of cash flows for the year:
Increase in accounts receivable
$102,000
Decrease in inventory
$18,000
Decrease in accounts payable
$35,000
Increase in retained earnings
$29,000
Cash received from sale of building
$215,000
Gain on sale of building
$47,000
Depreciation expense
$32,000
Majorn uses the indirect method to prepare its statement of cash flows. What is Majorn’s net cash
provided by (used in) operating activities?
A) $41,000
B) $(53,000)
C) $185,000
D) $279,000
Net income
cash basis:
Depreciation
Decrease in inventory
Increase in accounts receivable
)
Decrease in accounts payable
)
Gain on sale of building
)
)
activities
69) Klutz Dance Studio had net income of $167,000 for the year just ended. Klutz collected the
following additional information to prepare its statement of cash flows for the year:
Decrease in accounts receivable
$24,000
Increase in accounts payable
$11,000
Increase in retained earnings
$92,000
Cash paid for purchase of new music equipment
$20,000
Depreciation expense
$5,000
Klutz uses the indirect method to prepare its statement of cash flows. What is Klutz’s net cash
provided by (used in) operating activities?
A) $95,000
B) $137,000
C) $185,000
D) $207,000
Net income
basis:
Depreciation
Decrease in accounts receivable
Increase in accounts payable
activities
70) Carriveau Corporation’s most recent balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents
$
31
$
34
Accounts receivable
73
67
Inventory
74
64
Total current assets
178
165
Property, plant, and equipment
456
370
Less accumulated depreciation
207
196
Net property, plant, and equipment
249
174
Total assets
$
427
$
339
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable
$
49
$
56
Accrued liabilities
19
20
Income taxes payable
26
24
Total current liabilities
94
100
Bonds payable
152
200
Total liabilities
246
300
Stockholders’ equity:
Common stock
35
30
Retained earnings
146
9
Total stockholders’ equity
181
39
Total liabilities and stockholders’ equity
$
427
$
339
Net income for the year was $172. Cash dividends were $35. The company did not sell or retire
any property, plant, and equipment during the year. The net cash provided by (used in) operating
activities for the year was:
A) $183
B) $246
C) $(11)
D) $161
71) Morbeck Corporation’s net income last year was $56,000. The company paid a cash dividend
of $31,000 and did not sell or retire any property, plant, and equipment last year. Changes in
selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable
$
(8,000
)
Inventory
$
(6,000
)
Prepaid expenses
$
12,000
Accumulated depreciation
$
23,000
Liability Accounts:
Accounts payable
$
(10,000
)
Accrued liabilities
$
7,000
Income taxes payable
$
5,000
Bonds payable
$
40,000
Based solely on this information, the net cash provided by (used in) operating activities under the
indirect method on the statement of cash flows would be:
A) $83,000
B) $102,000
C) $29,000
D) $79,000
Net income
$
basis:
Depreciation
$
23,000
Decrease in accounts receivable
8,000
Decrease in inventory
6,000
Increase in prepaid expenses
(12,000
)
Decrease in accounts payable
(10,000
)
Increase in accrued liabilities
7,000
Increase in income taxes payable
5,000
72) The following transactions occurred last year at Jogger Corporation:
Issuance of shares of the company’s own common stock
$110,000
Dividends paid to the company’s own shareholders
$3,000
Sale of long-term investment
$4,000
Interest paid to lenders
$8,000
Retirement of the company’s own bonds payable
$100,000
Proceeds from sale of the company’s used equipment
$29,000
Purchase of new equipment
$170,000
Based solely on the above information, the net cash provided by (used in) financing activities for
the year on the statement of cash flows would be:
A) $424,000
B) $(138,000)
C) $(1,000)
D) $7,000
Repaying principal on bonds payable
)
Issuance of common stock
Paying a dividend
)
Net cash provided by (used in) financing activities
56
73) Degeare Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents
$
35
$
28
Accounts receivable
65
77
Inventory
47
40
Total current assets
147
145
Property, plant, and equipment
518
490
Less accumulated depreciation
233
213
Net property, plant, and equipment
285
277
Total assets
$
432
$
422
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable
$
61
$
54
Accrued liabilities
15
16
Income taxes payable
36
35
Total current liabilities
112
105
Bonds payable
72
100
Total liabilities
184
205
Stockholders’ equity:
Common stock
82
80
Retained earnings
166
137
Total stockholders’ equity
248
217
Total liabilities and stockholders’ equity
$
432
$
422
Income Statement
Sales
$590
Cost of goods sold
363
Gross margin
227
Selling and administrative expense
184
Net operating income
43
Gain on sale of plant and equipment
13
Income before taxes
56
Income taxes
17
Net income
$39
Cash dividends were $10. The company sold equipment for $18 that was originally purchased for
$10 and that had accumulated depreciation of $5. The net cash provided by (used in) operating
activities for the year was:
A) $73
B) $76
C) $43
D) $63
Net income
Adjustments to convert net income to a cash basis:
Depreciation ($233 – $213 + $5)
Decrease in accounts receivable ($65 – $77)
Increase in inventory ($47 – $40)
)
Increase in accounts payable ($61 – $54)
Decrease in accrued liabilities ($15 – $16)
)
Increase in income taxes payable ($36 – $35)
Gain on sale of equipment
Net cash provided by (used in) operating activities
74) The data given below are from the accounting records of the Kuhn Corporation:
Net Income (accrual basis)
$45,000
Depreciation Expense
$9,000
Decrease in Accounts Payable
$2,500
Decrease in Inventory
$3,000
Increase in Bonds Payable
$10,000
Sale of Common Stock for cash
$30,000
Increase in Accounts Receivable
$4,500
Based on this information, the net cash provided by (used in) operating activities using the indirect
method would be:
A) $55,000
B) $58,000
C) $50,000
D) $60,000
Net income
Adjustments to convert net income to a cash basis:
Depreciation
Increase in accounts receivable
)
Decrease in inventory
Decrease in accounts payable
)
Net cash provided by (used in) operating activities
75) Frankin Corporation’s net cash provided by operating activities was $192; its capital
expenditures were $154; and its cash dividends were $27. The company’s free cash flow was:
A) $38
B) $373
C) $11
D) $165
76) Suggett Corporation’s net cash provided by operating activities was $34; its income taxes were
$12; its capital expenditures were $24; and its cash dividends were $7. The company’s free cash
flow was:
A) $(19)
B) $77
C) $3
D) $15
77) Beacham Corporation’s net cash provided by operating activities was $115; its net income was
$95; its capital expenditures were $65; and its cash dividends were $17. The company’s free cash
flow was:
A) $292
B) $13
C) $33
D) $128