93) What is Stone’s net cash provided by (used in) investing activities?
A) $0
B) $(15,000)
C) $25,000
D) $45,000
94) What is Stone’s net cash provided by (used in) financing activities?
A) $(20,000)
B) $(15,000)
C) $5,000
D) $65,000
82
Krech Corporation’s comparative balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Current assets:
Cash and cash equivalents
$
31,000
$
28,000
Accounts receivable
18,000
20,000
Inventory
58,000
56,000
Prepaid expenses
12,000
10,000
Total current assets
119,000
114,000
Property, plant, and equipment
374,000
354,000
Less accumulated depreciation
190,000
165,000
Net property, plant, and equipment
184,000
189,000
Total assets
$
303,000
$
303,000
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable
$
13,000
$
9,000
Accrued liabilities
52,000
53,000
Income taxes payable
67,000
69,000
Total current liabilities
132,000
131,000
Bonds payable
76,000
73,000
Total liabilities
208,000
204,000
Stockholders’ equity:
Common stock
28,000
26,000
Retained earnings
67,000
73,000
Total stockholders’ equity
95,000
99,000
Total liabilities and stockholders’ equity
$
303,000
$
303,000
The company’s net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It
did not sell or retire any property, plant, and equipment during the year. The company uses the
indirect method to determine the net cash provided by operating activities.
95) Which of the following is correct regarding the operating activities section of the statement of
cash flows?
A) The change in Accounts Receivable will be subtracted from net income; The change in
Inventory will be added to net income
B) The change in Accounts Receivable will be added to net income; The change in Inventory will
be subtracted from net income
C) The change in Accounts Receivable will be added to net income; The change in Inventory will
be added to net income
D) The change in Accounts Receivable will be subtracted from net income; The change in
Inventory will be subtracted from net income
96) Which of the following is correct regarding the operating activities section of the statement of
cash flows?
A) The change in Accounts Payable will be added to net income; The change in Accrued
Liabilities will be subtracted from net income
B) The change in Accounts Payable will be subtracted from net income; The change in Accrued
Liabilities will be added to net income
C) The change in Accounts Payable will be subtracted from net income; The change in Accrued
Liabilities will be subtracted from net income
D) The change in Accounts Payable will be added to net income; The change in Accrued
Liabilities will be added to net income
97) Which of the following is correct regarding the operating activities section of the statement of
cash flows?
A) The change in Prepaid Expenses will be added to net income; The change in Income Taxes
Payable will be subtracted from net income
B) The change in Prepaid Expenses will be subtracted from net income; The change in Income
Taxes Payable will be subtracted from net income
C) The change in Prepaid Expenses will be subtracted from net income; The change in Income
Taxes Payable will be added to net income
D) The change in Prepaid Expenses will be added to net income; The change in Income Taxes
Payable will be added to net income
98) The company’s net cash provided by (used in) operating activities is:
A) $29,000
B) $19,000
C) $27,000
D) $21,000
99) The company’s net cash provided by (used in) investing activities is:
A) $(20,000)
B) $5,000
C) $45,000
D) $(22,000)
88
Salsedo Corporation’s balance sheet and income statement appear below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Cash and cash equivalents
$
31
$
33
Accounts receivable
24
30
Inventory
53
47
Property, plant, and equipment
461
390
Less accumulated depreciation
306
256
Total assets
$
263
$
244
Liabilities and stockholders’ equity:
Accounts payable
$
42
$
49
Accrued liabilities
16
17
Income taxes payable
39
40
Bonds payable
75
90
Common stock
53
50
Retained earnings
38
(2
)
Total liabilities and stockholders’ equity
$
263
$
244
Income Statement
Sales
$634
Cost of goods sold
400
Gross margin
234
Selling and administrative expense
174
Net operating income
60
Gain on sale of equipment
10
Income before taxes
70
Income taxes
21
Net income
$49
Cash dividends were $9. The company sold equipment for $15 that was originally purchased for
$10 and that had accumulated depreciation of $5. It did not issue any bonds payable or repurchase
any of its own common stock.
100) The net cash provided by (used in) operating activities for the year was:
A) $60
B) $95
C) $94
D) $85
Net income
Adjustments to convert net income to a cash basis:
Depreciation ($306 + $5 – $256)
Decrease in accounts receivable ($24 – $30)
Increase in inventory ($53 – $47)
Decrease in accounts payable ($42 – $49)
)
Decrease in accrued liabilities ($16 – $17)
)
Decrease in income taxes payable ($39 – $40)
)
Gain on sale
Net cash provided by (used in) operating activities
101) The net cash provided by (used in) investing activities for the year was:
A) $(81)
B) $(66)
C) $66
D) $15
102) The net cash provided by (used in) financing activities for the year was:
A) $(9)
B) $(15)
C) $(21)
D) $3
91
The most recent balance sheet and income statement of Penaloza Corporation appear below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Cash and cash equivalents
$
47
$
39
Accounts receivable
49
55
Inventory
36
39
Property, plant, and equipment
474
370
Less accumulated depreciation
250
218
Total assets
$
356
$
285
Liabilities and stockholders’ equity:
Accounts payable
$
36
$
35
Accrued liabilities
27
25
Income taxes payable
36
44
Bonds payable
88
80
Common stock
45
40
Retained earnings
124
61
Total liabilities and equity
$
356
$
285
Income Statement
Sales
$773
Cost of goods sold
468
Gross margin
305
Selling and administrative expense
189
Net operating income
116
Income taxes
35
Net income
$81
The company paid a cash dividend of $18. It did not dispose of any property, plant, and equipment.
The company did not retire any bonds payable or repurchase any of its own common stock. The
following questions pertain to the company’s statement of cash flows.
103) The net cash provided by (used in) operating activities for the year was:
A) $117
B) $45
C) $36
D) $116
Net income
Adjustments to convert net income to a cash basis:
Depreciation ($250 – $218)
Decrease in accounts receivable ($49 – $55)
Decrease in inventory ($36 – $39)
Increase in accounts payable ($36 – $35)
Increase in accrued liabilities ($27 – $25)
Decrease in income taxes payable ($36 – $44)
Net cash provided by (used in) operating activities
104) The net cash provided by (used in) investing activities for the year was:
A) $72
B) $104
C) $(104)
D) $(72)
105) The net cash provided by (used in) financing activities for the year was:
A) $(18)
B) $5
C) $(5)
D) $8
94
Financial statements of Rukavina Corporation follow:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Cash and cash equivalents
$
36
$
38
Accounts receivable
39
44
Inventory
34
35
Property, plant, and equipment
386
360
Less accumulated depreciation
202
191
Total assets
$
293
$
286
Liabilities and stockholders’ equity:
Accounts payable
$
71
$
61
Bonds payable
176
220
Common stock
81
80
Retained earnings
(35
)
(75
)
Total liabilities and stockholders’ equity
$
293
$
286
Income Statement
Sales
$518
Cost of goods sold
336
Gross margin
183
Selling and administrative expense
113
Net operating income
69
Income taxes
21
Net income
$48
Cash dividends were $8. The company did not dispose of any property, plant, and equipment. It
did not issue any bonds payable or repurchase any of its own common stock. The following
questions pertain to the company’s statement of cash flows.
106) The net cash provided by (used in) operating activities for the year was:
A) $21
B) $75
C) $27
D) $69
Net income
Adjustments to convert net income to a cash basis:
Depreciation ($202 – $191)
Decrease in accounts receivable ($39 – $44)
Decrease in inventory ($34 – $35)
Increase in accounts payable ($71 – $61)
Net cash provided by (used in) operating activities
107) The net cash provided by (used in) investing activities for the year was:
A) $26
B) $15
C) $(26)
D) $(15)
108) The net cash provided by (used in) financing activities for the year was:
A) $(8)
B) $(44)
C) $(51)
D) $1
Buckley Corporation’s most recent comparative balance sheet appears below:
Comparative Balance Sheet
Ending
Balance
Beginning
Balance
Assets:
Cash and cash equivalents
$
19
$
20
Accounts receivable
26
27
Inventory
56
51
Property, plant, and equipment
686
550
Less accumulated depreciation
430
363
Total assets
$
357
$
285
Liabilities and stockholders’ equity:
Accounts payable
$
30
$
34
Bonds payable
43
40
Common stock
54
50
Retained earnings
230
161
Total liabilities and stockholders’ equity
$
357
$
285
The company’s net income for the year was $91 and it paid a cash dividend of $22. It did not
dispose of any property, plant, and equipment during the year. The company did not retire any
bonds payable or repurchase any of its own common stock.
109) The net cash provided by (used in) operating activities for the year was:
A) $32
B) $59
C) $130
D) $150
110) The net cash provided by (used in) investing activities for the year was:
A) $(69)
B) $69
C) $136
D) $(136)
111) The net cash provided by (used in) financing activities for the year was:
A) $(22)
B) $3
C) $4
D) $(15)
112) The free cash flow for the year was:
A) $(8)
B) $14
C) $128
D) $308