40.
Which of the following would be subtracted from net income when determining cash flows
from operating activities under the indirect method?
41.
Which of the following would be added to net income when determining cash flows from
operating activities under the indirect method?
42.
Which of the following would be subtracted from net income when determining cash flows
from operating activities under the indirect method?
43.
Rice Company, a retailer, has provided the following information pertaining to its recent year
of operation:
• Net income, $100,000
• Accounts receivable increased $9,000
• Prepaid insurance decreased $3,000
• Depreciation expense was $15,000
• Gain on sale of land, $2,000
• Wages payable decreased $7,000
• Unearned revenue increased $11,000
Using the indirect method, how much was Rice’s net cash provided by operating activities?
44.
Darwin Company, a manufacturer, has provided the following information pertaining to its
recent year of operation:
• Net income, $200,000
• Accounts receivable increased $18,000
• Prepaid insurance increased $7,000
• Depreciation expense was $25,000
• Loss on sale of a building was $22,000
• Wages payable increased $14,000
• Unearned revenue decreased $21,000
Using the indirect method, how much was Darwin’s net cash provided by operating activities?
45.
RM Company, a manufacturer, has provided the following information pertaining to its recent
year of operation:
• Net income, $300,000
• Accounts payable increased $24,000
• Prepaid rent decreased $10,000
• Depreciation expense was $35,000
• Accounts receivable increased $34,000
• Gain on sale of a building was $11,000
• Wages payable decreased $21,000
• Unearned revenue increased $44,000
Using the indirect method, how much was RM’s net cash provided by operating activities?
46.
GJ Company, a manufacturer, has provided the following information pertaining to its recent
year of operation:
• Net income, $500,000
• Accounts payable decreased $42,000
• Prepaid assets increased $31,000
• Depreciation expense was $53,000
• Accounts receivable decreased $41,000
• Loss on sale of a depreciable asset was $31,000
• Wages payable increased $19,000
• Unearned revenue decreased $31,000
• Patent amortization expense was $5,000
Using the indirect method, how much was GJ’s net cash provided by operating activities?
47.
DJ Company, a manufacturer, uses the indirect method for preparing its statement of cash
flows. The company has provided the following information pertaining to its recent year of
operation:
• Cash flow from operating activities, $272,000
• Accounts payable decreased $21,000
• Prepaid assets increased $15,000
• Depreciation expense was $27,000
• Accounts receivable decreased $21,000
• Loss on sale of a depreciable asset was $16,000
• Wages payable increased $10,000
• Unearned revenue decreased $16,000
• Patent amortization expense was $10,000
How much was DJ’s net income?
48.
KJ Company, a manufacturer, uses the indirect method for preparing its statement of cash
flows. The company has provided the following information pertaining to its recent year of
operation:
• Cash flow from operating activities, $136,000
• Accounts payable increased $11,000
• Prepaid assets decreased $8,000
• Depreciation expense was $12,000
• Accounts receivable increased $23,000
• Loss on sale of a depreciable asset was $6,000
• Wages payable decreased $9,000
• Unearned revenue decreased $19,000
• Patent amortization expense was $3,000
How much was KJ’s net income?
49.
A company reported net income of $200,000 during 2016. The company reported depreciation
expense of $35,000, patent amortization of $10,000 and a $5,000 loss on the sale of
equipment. Using the indirect method, how much is the company’s net cash flow from
operating activities?
50.
Which of the following statements does not correctly describe an adjustment to net income
when determining cash flows from operating activities using the indirect method?
51.
The following information has been provided to you by RKJ Company:
Net income
$300,000
Decrease in accounts payable
$114,000
Increase in inventory
$22,000
Increase in accounts receivable
$24,000
Decrease in bonds payable
$25,000
Loss on sale of a depreciable asset
$19,000
Depreciation expense
$40,000
Decrease in income taxes payable
$12,000
Using the indirect method, what is the net cash provided by operating activities?
Cash flow from operating activities $187,000.
Net income
Depreciation expense
Loss on sale of depreciable asset
Decrease in accounts payable
Increase in inventory
Increase in accounts receivable
Decrease in income taxes payable
Net cash provided by operating activities
52.
Which of the following statements does not correctly describe an adjustment to net income
when determining cash flows from operating activities using the indirect method?
53.
Reliance Corporation has provided the following information for the year ended December 31,
2016:
• The equipment account balance increased $200,000.
• The equipment accumulated depreciation account balance increased $35,000.
• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
• Depreciation expense recorded on the equipment during the year was $65,000.
Which of the following statements is correct with respect to determining cash flow from
operating activities?
54.
Allen Company’s 2016 income statement reported total revenues, $850,000 and total expenses
(including $40,000 depreciation) of $720,000. The 2015 balance sheet reported the following:
accounts receivable—beginning balance, $50,000 and ending balance, $40,000; accounts
payable—beginning balance, $22,000 and ending balance, $28,000. Therefore, based only on
this information, how much was the 2016 net cash provided by operating activities?
55.
Which statement regarding the indirect method is false?
56.
Which of the following statements about the quality of income ratio is correct?
57.
Which of the following statements about the quality of income ratio is incorrect?
58.
During 2016, Boogle reported net income of $785 million and net cash inflow from operating
activities of $1,196 million. During 2015, Boogle’s net income was $563 million and net cash
inflow from operations was $1,237 million. Which of the following is incorrect about the
quality of income ratios?