127)
When preparing a statement of cash flows using the indirect method, which of the following is
correct?
A)
The declaration of a cash dividend should be a use of cash in the financing activities section.
B)
The issuance of a stock dividend should be a use of cash in the financing activities section.
C)
The purchase of land and a building by issuing a long-term note payable should be a source of
cash in the financing activities section.
D)
Proceeds from the sale of equipment should be added to net income in the operating activities
section.
E)
A loss on the sale of land should be added to net income in the operating activities section.
128)
A company’s income statement showed the following: net income, $134,000; depreciation expense,
$30,000; and gain on sale of plant assets, $4,000. An examination of the company’s current assets
and current liabilities showed the following changes as a result of operating activities: accounts
receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses
increased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by
operating activities.
A) $96,600. B) $141,000. C) $88,600. D) $156,600. E) $148,600.
129)
A company’s income statement showed the following: net income, $124,000 and depreciation
expense, $30,000. An examination of the company’s current assets and current liabilities showed
the following changes as a result of operating activities: accounts receivable decreased $9,400;
merchandise inventory increased $18,000; and accounts payable increased $3,400. Calculate the
net cash provided or used by operating activities.
A) $148,800. B) $178,000. C) $159,200. D) $118,000. E) $123,200.
130)
Use the following information and the indirect method to calculate the net cash provided or used
by operating activities:
Net income
$85,300
Depreciation expense
12,000
Increase in merchandise inventory
2,050
Increase in accounts payable
6,150
A) $85,700. B) $69,900. C) $93,900. D) $108,900. E) $81,600.
131)
In preparing a company’s statement of cash flows for the most recent year using the indirect
method, the following information is available:
1.
Net income for the year was
$52,000
Accounts payable decreased by
$18,000
Accounts receivable increased by
$25,000
Inventories increased by
$ 5,000
Cash dividends paid were
$14,000
Depreciation expense was
$20,000
Net cash provided by operating activities was:
A) $120,000. B) $70,000. C) $110,000
D) $24,000.
E) $71,000.
132)
In preparing a company’s statement of cash flows for the most recent year using the indirect method,
the following information is available:
Net income for the year was
$52,000
Accounts payable increased by
18,000
Accounts receivable decreased by
25,000
Inventories decreased by
5,000
Cash dividends paid were
14,000
Depreciation expense was
20,000
Net cash provided by operating activities was:
A) $120,000. B) $110,000. C) $71,000.
D) $70,000.
E) $24,000.
133)
In preparing a company’s statement of cash flows for the most recent year using the indirect method,
the following information is available:
Net income for the year was
$52,000
Accounts payable increased by
18,000
Accounts receivable decreased by
25,000
Inventories increased by
5,000
Depreciation expense was
30,000
Net cash provided by operating activities was:
A) $60,000. B) $70,000. C) $130,000. D) $80,000. E) $120,000.
134)
In preparing a company’s statement of cash flows for the most recent year using the indirect method,
the following information is available:
Net income for the year was
$52,000
Accounts payable decreased by
18,000
Accounts receivable increased by
25,000
Inventories increased by
5,000
Depreciation expense was
30,000
Net cash provided by operating activities was:
A) $60,000. B) $34,000. C) $80,000. D) $52,000. E) $70,000.
135)
A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000
cash. The amount that should be reported as a source of cash under cash flows from investing
activities is:
A) $5,000.
B) $45,000.
C)
Zero. This is an operating activity.
D)
Zero. This is a financing activity.
E) $50,000.
136)
A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000
cash. The amount that should be reported in the operating activities section reported under the
direct method is:
A) $50,000.
B) Zero. This is a financing activity.
C) $45,000.
D)
Zero. This is an investing activity.
E) $5,000.
137)
A machine with a cost of $130,000, accumulated depreciation of $85,000, and current year
depreciation expense of $17,000 is sold for $40,000 cash. The amount that should be reported as a
source of cash under cash flows from investing activities is:
A) $5,000. B) $17,000. C) $40,000. D) $28,000. E) $45,000.
138)
A machine with a cost of $130,000, current year depreciation expense of $17,000 and accumulated
depreciation of $85,000 is sold for $40,000 cash. The total amount that should be reported in the
operating section of the statement of cash flow as per indirect method is:
A) $17,000. B) $22,000. C) $57,000. D) $4,000. E) $21,000.
139)
A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are
retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows
from financing activities is:
A) $(7,000). B) $7,000. C) $(57,000). D) $(60,000). E) $(3,000).
140)
Addams Corporation paid cash dividends totaling $75,000 during its most recent fiscal year. How
should this information be reported on Addams’s statement of cash flows?
A)
In operating activities as a source of funds.
B)
In investing activities as a source of funds.
C)
In financing activities as a use of funds.
D)
In financing activities as a source of funds.
E)
In investing activities as a use of funds.
141)
Use the following information to calculate cash received from dividends:
Dividends revenue
$ 29,800
Dividends receivable, January 1
2,600
Dividends receivable, December 31
3,400
A) $26,400. B) $32,400. C) $29,000. D) $29,800. E) $30,600.
142)
Use the following information to calculate cash received from dividends:
Dividends revenue
$ 63,500
Dividends receivable, January 1
3,600
Dividends receivable, December 31
3,100
A) $64,000. B) $63,500. C) $60,400. D) $67,100. E) $63,000.
143)
Analysis reveals that a company had a net increase in cash of $20,000 for the current year. Net cash
provided by operating activities was $18,000; net cash used in investing activities was $10,000 and
net cash provided by financing activities was $12,000. If the year-end cash balance is $24,000, the
beginning cash balance was:
A) $40,000. B) $4,000. C) $44,000. D) $39,000. E) $16,000.
144)
Stormer Company reports the following amounts on its statement of cash flow: Net cash provided
by operating activities was $28,000; net cash used in investing activities was $10,000 and net cash
used in financing activities was $12,000. If the beginning cash balance is $5,000, what is the
ending cash balance?
A) $31,000. B) $45,000. C) $6,000. D) $55,000. E) $11,000.
145)
Bagrov Corporation had a net decrease in cash of $10,000 for the current year. Net cash used in
investing activities was $52,000 and net cash used in financing activities was $38,000. What
amount of cash was provided (used) in operating activities?
A)
$80,000 provided.
B)
$100,000 provided.
C) $(100,000) used.
D) $(10,000) used.
E) $(80,000) used.