146)
The accountant for Crusoe Company is preparing the company’s statement of cash flows for the
fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$126,000
Cash dividends declared for the year
46,000
Proceeds from the sale of equipment
81,000
Gain on the sale of equipment
7,000
Cash dividends payable at the beginning of the year
18,000
Cash dividends payable at the end of the year
20,000
Net income for the year
92,000
What is the ending balance for retained earnings?
A) $352,000. B) $218,000. C) $179,000.
D) $172,000.
E) $170,000.
147)
The accountant for Crusoe Company is preparing the company’s statement of cash flows for the
fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$126,000
Cash dividends declared for the year
46,000
Proceeds from the sale of equipment
81,000
Gain on the sale of equipment
7,000
Cash dividends payable at the beginning of the year
18,000
Cash dividends payable at the end of the year
20,000
Net income for the year
92,000
The amount of cash dividends paid during the year would be:
A) $44,000. B) $64,000. C) $48,000. D) $46,000. E) $8,000.
148)
The accountant for Huckleberry Company is preparing the company’s statement of cash flows for the
fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$151,000
Cash dividends declared for the year
46,000
Net income for the year
92,000
What is the ending balance for retained earnings?
A) $243,000. B) $197,000. C) $105,000.
D) $13,000.
E) $264,000.
149)
The accountant for Mandarin Company is preparing the company’s statement of cash flows for the
fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year
$819,000
Net income for the year
230,000
Cash dividends declared for the year
42,000
Retained earnings balance at the end of the year
1,007,000
Cash dividends payable at the beginning of the year
10,000
Cash dividends payable at the end of the year
11,000
84
What is the amount of cash dividends paid that should be reported in the financing section of the
statement of cash flows?
A) $63,000. B) $41,000. C) $1,000. D) $43,000. E) $42,000.
150)
In preparing a company’s statement of cash flows for the most recent year, the following information
is available:
Loss on the sale of equipment
$ 14,000
Purchase of equipment
225,000
Proceeds from the sale of equipment
106,000
Repayment of outstanding bonds 85
87,000
Repayment of outstanding bonds
87,000
Purchase of treasury stock
25,000
Issuance of common stock
96,000
Purchase of land
115,000
Increase in accounts receivable during the year
33,000
Decrease in accounts payable during the year
75,000
Payment of cash dividends
35,000
Net cash flows from investing activities for the year were:
A)
$234,000 of net cash used.
B)
$340,000 of net cash used.
C)
$120,000 of net cash provided.
D)
$259,000 of net cash used.
E)
$280,000 of net cash provided.
151)
In preparing a company’s statement of cash flows for the year just ended, the following information
is available:
Loss on the sale of equipment
$ 14,000
Purchase of equipment
225,000
Proceeds from the sale of equipment
106,000
Repayment of outstanding bonds
87,000
Purchase of treasury stock
25,000
Issuance of common stock
96,000
Purchase of land
115,000
Increase in accounts receivable during the year
33,000
Decrease in accounts payable during the year
75,000
Payment of cash dividends
35,000
Net cash flows from financing activities for the year were:
A)
$347,000 of net cash used.
B)
$26,000 of net cash used.
C)
$51,000 of net cash used.
D)
$147,000 of net cash used.
E)
$340,000 of net cash used.
152)
In preparing Marjorie Company’s statement of cash flows for the most recent year, the following
information is available:
Purchase of equipment
$ 260,000
Proceeds from the sale of equipment
87,000
Purchase of land
91,000
Net cash flows from investing activities for the year were:
A)
$438,000 of net cash provided.
B)
$264,000 of net cash provided.
C)
$438,000 of net cash used.
D)
$351,000 of net cash used.
E)
$264,000 of net cash used.
89
153)
In preparing a company’s statement of cash flows for the most recent year, Ransom Corp. reported
the following information:
Repayment of outstanding bonds
$ 107,000
Purchase of treasury stock
62,000
Issuance of common stock
46,000
Payment of cash dividends
Net cash flows from financing activities for the year were:
15,
A)
$230,000 of net cash provided.
B)
$108,000 of net cash used.
C)
$138,000 of net cash provided.
D)
$230,000 of net cash used.
E)
$138,000 of net cash used.
154)
When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash
flows from operating activities generally affect:
A)
Noncurrent liability and equity accounts.
B)
Noncurrent assets.
C)
Net income, current assets, and current liabilities.
D)
Equity accounts only.
E)
Both noncurrent assets and noncurrent liabilities.
155)
When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash
flows from investing activities generally affect:
A)
Noncurrent liability and equity accounts.
B)
Noncurrent assets.
C)
Equity accounts only.
D)
Net income, current assets, and current liabilities.
E)
Both noncurrent assets and noncurrent liabilities.
156)
When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash
flows from financing activities generally affect:
A)
Both noncurrent assets and noncurrent liabilities.
B)
Noncurrent assets.
C)
Net income, current assets, and current liabilities.
D)
Noncurrent liability and equity accounts.
E)
Equity accounts only.
157)
Which of the following transactions or events should be reported as a source of cash from
operating activities when using the direct method?
A)
Depreciation expense.
B)
Cash collections from customers.
C)
Cash received from the sale of treasury stock.
D)
Cash received from the sale of a building.
E)
Credit sales.
158)
When the operating activities section of the statement of cash flows is reported using the direct
method, the FASB requires:
A)
The income statement to be prepared under the cash basis of accounting.
B)
The preparation of the statement of cash flows under the indirect method be completed and
reported with the statement of cash flows prepared using the direct method.
C)
Footnotes to the financial statements disclosing the difference between net income and the
cash provided or used by financing activities.
D)
A reconciliation of net income to net cash provided or used by operating activities.
E)
Noncash investing and financing activities be included in the statement of cash flows.
159)
All of the following statements related to reporting cash flows from operating activities under U.S.
GAAP and IFRS are true except:
A)
The definition of cash and cash equivalents is similar for U.S. GAAP and IFRS.
B)
U.S. GAAP requires cash outflows for interest expense to be classified as financing activities.
C)
U.S. GAAP requires cash flows from interest revenue and dividend revenue be classified as
operating activities.
D)
IFRS permits classification of interest expense under operating or financing activities.
E)
IFRS permits classification of interest revenue and dividend revenue under operating or
investing activities.
160)
All of the following statements related to preparation of the statement of cash flows under U.S.
GAAP and IFRS are true except:
A)
Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using
either the direct or indirect method.
B)
IFRS permits classification of cash outflows for interest expense under operating or financing
based on which one results in better cash flows from operating activities.
C)
IFRS permits classification of interest expense under operating or financing activities
provided it is consistently applied across periods.
D)
IFRS permits the splitting of income tax cash flows among operating, investing, and
financing depending on the sources of that tax.
E)
U.S. GAAP requires cash outflows for income tax be classified as operating activities.
161)
Mercury Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing
$150,000 was sold for its book value in Year 2. There were no other equipment purchases or sales
during the year. The following selected information is available for Mercury Company from its
comparative balance sheet. Compute the cash received from the sale of the equipment.
At December 31
Year 2
Year 1
Equipment
$600,000
$750,000
Accumulated Depreciation-Equipment
428,000
500,000
A) $68,000. B) $32,000. C) $38,000. D) $36,000. E) $40,000.
162)
Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing
$140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for
Jamison Company from its comparative balance sheet. Compute the cash received from the sale of
the equipment.
At December 31
Year 2
Year 1
Equipment
$610,000
$750,000
Accumulated Depreciation-Equipment
428,000
500,000
A) $38,000. B) $23,000. C) $40,000. D) $35,000. E) $67,000.
163)
Jeffreys Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing
$240,000 was sold for a $10,000 loss in Year 2. The following selected information is available for
Jeffreys Company from its comparative balance sheet. Compute the cash received from the sale of
the equipment.
At December 31
Year 2
Year 1
Equipment
$510,000
$750,000
Accumulated Depreciation-Equipment
328,000
500,000
A) $62,000. B) $58,000. C) $18,000. D) $38,000. E) $28,000.