Q&A Hero

Q: Free cash flow measures the operating cash flow available to a company after it purchases the property, plant, and equipment (PP&E) necessary to maintain its current operations. a. True b. False

Q: If $475,000 of bonds payable are sold at 101, $475,000 would be reported in the financing activities section of the statement of cash flows. a. True b. False

Q: To determine cash paid for merchandise for the statement of cash flows using the direct method, a decrease in accounts payable is added to the cost of merchandise sold. a. True b. False

Q: Cash, as the term is used for the statement of cash flows, could indicate either cash or cash equivalents. a. True b. False

Q: The acquisition of land in exchange for common stock is an example of a noncash investing and financing activity. a. True b. False

Q: The statement of cash flows reports a firm's major sources of cash receipts and major uses of cash for a period of time. a. True b. False

Q: The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method. a. True b. False

Q: Cash flows from investing activities, as part of the statement of cash flows, would include any payments for the purchase of treasury stock. a. True b. False

Q: Sales reported on the income statement were $372,000. The accounts receivable balance declined $4,500 over the year. The amount of cash received from customers was $367,500. a. True b. False

Q: To determine cash paid for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses payable is added to operating expenses other than depreciation. a. True b. False

Q: Cash inflows and outflows are not netted in the investing or financing sections of the statement of cash flows but are separately disclosed to give the reader full information. a. True b. False

Q: Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed. a. True b. False

Q: The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate. a. True b. False

Q: If land costing $145,000 was sold for $205,000, the $60,000 gain on the sale would be added to net income in the operating activities section of the statement of cash flows (prepared by the indirect method). a. True b. False

Q: Under the direct method of preparing a statement of cash flows, the gain on the sale of land is not adjusted or reported as part of cash flows from operating activities. a. True b. False

Q: In preparing the operating activities section of the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period. a. True b. False

Q: The statement of cash flows shows the effects on cash of a company's operating, investing, and financing activities. a. True b. False

Q: A building with a cost of $153,000 and accumulated depreciation of $42,000 was sold for an $11,000 gain. When using the indirect method, the cash generated from this investing activity is $121,000. a. True b. False

Q: Cash flows from operating activities, as part of the statement of cash flows, include cash transactions that enter into the determination of net income. a. True b. False

Q: The statement of cash flows is an optional financial statement. a. True b. False

Q: Under the indirect method, expenses that do not affect cash are added to net income in the operating activities section of the statement of cash flows. a. True b. False

Q: If a business issued bonds payable in exchange for land, the transaction would be reported in a separate section of the statement of cash flows. a. True b. False

Q: Net income for the year was $29,500. Accounts receivable increased $2,500, and accounts payable increased $5,400. There were no other changes in noncash current assets and liabilities. Under the indirect method, the net cash flows from operations is $32,400. a. True b. False

Q: A cash flow per share amount should be reported on the statement of cash flows. a. True b. False

Q: Cash flows from financing activities, as part of the statement of cash flows, would include any payments for dividends. a. True b. False

Q: To determine cash paid for income taxes for the statement of cash flows using the direct method, an increase in income taxes payable is added to the income tax expense. a. True b. False

Q: Free cash flow is net cash flows from investing activities less cash used to purchase fixed assets needed to maintain current productive capacity. a. True b. False

Q: If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the financing activities section of the statement of cash flows. a. True b. False

Q: The declaration and issuance of a stock dividend would be reported on the statement of cash flows. a. True b. False

Q: Purchasing equipment by issuing a 6-month note should be shown on the statement of cash flows under the investing activities section. a. True b. False

Q: There is no difference in the investing and financing sections of the statement of cash flows using the indirect and direct methods. a. True b. False

Q: Cash paid to acquire treasury stock should be shown on the statement of cash flows under investing activities. a. True b. False

Q: If cash dividends of $135,000 were paid during the year and the company sold 1,000 shares of common stock at $30 per share, the statement of cash flows would report net cash flows from financing activities as $165,000. a. True b. False

Q: The income statement disclosed the following items for the current year:Depreciation expense $ 36,000Gain on disposal of equipment21,000Net income317,500Balances of the noncash current asset and current liability accounts changed between December 31, last year, and December 31, this year, as follows:Increase in accounts receivable$5,600Decrease in inventory3,200Decrease in prepaid insurance1,200Decrease in accounts payable3,800Increase in income taxes payable1,200Increase in dividends payable850​Prepare the operating activities section of the statement of cash flows using the indirect method.

Q: An analysis of the general ledger accounts indicates that equipment, with an original cost of $200,000 and accumulated depreciation of $170,000 on the date of sale, was sold for $20,000 during the year. Using this information, indicate the items to be reported on the statement of cash flows using the indirect method.

Q: The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:a. If sales for the current year were $375,000 and accounts receivable increased by $29,000 during the year, what was the amount of cash received from customers?b. If income taxes for the current year were $39,000 and income taxes payable decreased by $21,000 during the year, what was the amount of cash paid for income taxes?

Q: Dorman Company reported the following data:Net income$225,000Depreciation expense25,000Gain on disposal of equipment20,500Decrease in accounts receivable14,000Decrease in accounts payable3,600​Prepare the operating activities section of the statement of cash flows, using the indirect method.

Q: State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:a. Received $120,000 from the sale of land costing $70,000.b. Purchased investments for $75,000.c. Declared $35,000 cash dividends on stock. Dividends of $5,000 were payable at the beginning of the year, and $6,000 were payable at the end of the year.d. Acquired equipment for $64,000 cash.e. Declared and issued 100 shares of $20 par common stock as a stock dividend, when the market price of the stock was $32 a share.f. Recognized depreciation for the year, $37,000.g. Issued 85,000 shares of $10 par common stock for $25 a share, receiving cash.h. Issued $500,000 of 20-year, 10% bonds payable at 99.i. Borrowed $43,000 from Regional Bank, issuing a 5-year, 8% note for that amount.

Q: Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows: Dec. 31, Year 2Dec. 31, Year 1Accounts receivable$ 7,500$ 5,200Merchandise inventory11,50016,000Accounts payable4,3005,200Dividends payable4,0003,000​Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.

Q: Condensed comparative balance sheets of Barry Company at December 31, Years 1 and 2, are as follows: Year 2Year 1Cash$ 72,000 $ 42,500 Accounts receivable (net)61,000 70,200 Inventories121,000 105,000 Investments— 100,000 Equipment515,000 425,000 Accumulated depreciation—equipment (153,000) (175,000)Total assets$616,000 $567,700 Accounts payable$ 59,750 $ 47,250 Bonds payable— 75,000 Common stock, $20 par375,000 325,000 Paid-in capital in excess of par50,000 25,000 Retained earnings 131,250 95,450 Total liabilities and stockholders’ equity $616,000 $567,700 ​Additional data for Year 2 are as follows:Net income, $75,800.Depreciation reported on income statement, $38,000.Fully depreciated equipment costing $60,000 was scrapped, no salvage value, and new equipment was purchased for $150,000.Bonds payable of $75,000 were retired by payment at their face amount.2,500 shares of common stock were issued at $30 for cash.Cash dividends declared and paid, $40,000.Investments of $100,000 were sold for $125,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: End BeginningCash$ 67,000$73,000Accounts Receivable (net)73,00060,000Inventories54,00037,000Accounts Payable (merchandise creditors)43,00037,000Salaries Payable1,8003,800Sales (on account)210,000― Cost of Merchandise Sold70,000― Operating Expenses Other Than Depreciation67,000― ​Use the direct method to prepare the operating activities section of a statement of cash flows.

Q: Connor Designs Company has net cash flows from operating activities of $425,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% was used to replace machinery to maintain existing capacity.​What is the free cash flow for Connor Designs?

Q: The net income reported for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: EndBeginningCash$65,000$ 70,000Accounts Receivable (net)70,00057,000Inventories86,000102,000Prepaid Expenses4,0004,500Accounts Payable (merchandise creditors)51,00058,000Cash Dividends Payable4,5006,500Salaries Payable6,0007,500​Prepare the operating activities section of the statement of cash flows, using the indirect method.

Q: Based on the following, what is the free cash flow?Net cash flows from operating activities $318,000 Net cash flows used for investing activities (30,000)Net cash flows used for financing activities 30,000Cash flows from operations include $2,000 for depreciation. Cash flows from investing include the purchase of a replacement asset for $100,000 and the sale of the one used in production, which is now obsolete, for $70,000. Cash flows from financing include $70,000 of borrowing.

Q: The net income reported on the income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. In addition, equipment with an original cost of $130,000 and accumulated depreciation of $115,000 on the date of the sale was sold for $20,000. Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: EndBeginningCash$65,000$ 70,000Accounts Receivable (net)70,00063,000Inventories85,000102,000Prepaid Expenses4,0004,500Accounts Payable (merchandise creditors)50,00058,000Cash Dividends Payable4,5006,500Salaries Payable6,0007,500​Prepare the operating activities section of the statement of cash flows, using the indirect method.

Q: Lamar Corporation purchased land for $150,000. Later in the year, the company sold land with a book value of $190,000 for $200,000. Show how the effects of these transactions are reported on the statement of cash flows using the indirect method.

Q: On the basis of the details of the following common stock account, determine line item(s) for the financing section of the statement of cash flows.Common Stock, $10 Par BalanceDate ItemDebitCreditDebitCreditJan. 1Balance, 50,000 shares—— —500,000Mar. 75,000 shares issued at par for cash​—50,000​—550,000Sept. 202,500-share stock dividend​—25,000​—575,000Dec. 102,000 shares issued at $20 for cash​—20,000​—595,000

Q: Condensed comparative balance sheets of Breach Company at December 31, Years 1 and 2, are as follows: Year 2Year 1Cash$ 170,000 $ 74,000 Accounts receivable (net)78,000 85,000 Inventories106,500 90,000 Equipment395,000 370,000 Accumulated depreciation(195,000)(158,000)Total assets$ 554,500 $ 461,000 Accounts payable (merchandise creditors)$ 51,000 $ 50,000 Taxes payable2,500 5,000 Common stock, $10 par262,000 230,000 Retained earnings 239,000 176,000 Total liabilities and stockholders’ equity $ 554,500 $ 461,000 ​In addition, assume:Equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.Stock was issued for cash—3,200 shares at par.Net income for the current year was $76,000.Cash dividends declared and paid were $13,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Complete each of the columns in the following table, indicating in which section each item would be reported on the statement of cash flows (operating, investing, or financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For items that affect more than one section of the statement, indicate all affected. Assume that the indirect method of reporting cash flows from operating activities is used. The first item has been completed as an example.ItemStatement SectionAmountto Report+/– Effecton CashDepreciation of $15,000 for the periodOperating$15,000IncreaseIssuance of common stock for $35,000 Increase in accounts payable of $7,000 Retirement of $100,000 bonds payable at 97 Purchase of long-term investments for $94,500 Dividends declared and paid of $8,300 Increase in prepaid rent of $4,500 Decrease in inventory of $5,300 Purchase of equipment for $17,600 cash Sale of land originally costing $134,000 for $130,000 Decrease in taxes payable of $2,100

Q: The following two scenarios are independent of one another. a. An analysis of the general ledger accounts indicates that office equipment was sold for $39,600 during the year. The equipment originally cost $68,000 and had accumulated depreciation of $22,500 on the date of sale. Indicate how the elements of this transaction would be reported on the statement of cash flows using the indirect method.b. An analysis of the general ledger accounts indicates that delivery equipment, which cost $97,000 and on which accumulated depreciation totaled $42,100 on the date of sale, was sold for $57,500 during the year. Using this information, indicate the items to be reported on the statement of cash flows.

Q: Durrand Corporation’s accumulated depreciation increased by $12,000, while patents decreased by $2,200 between consecutive balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,300 from sale of land. The company earned a net income of $65,000. Assuming there were no changes in noncash current assets and liabilities, determine the net cash flows from operating activities under the indirect method.

Q: Condensed comparative balance sheets of Branch Company at December 31, Years 1 and 2, are as follows: Year 2Year 1Cash$ 65,000 $ 54,000 Accounts receivable (net)78,000 85,000 Inventories106,500 90,000 Land— 20,000 Equipment495,000 370,000 Accumulated depreciation(215,000)(158,000)Total assets$529,500 $461,000 Accounts payable (merchandise creditors)$ 53,500 $ 55,000 Common stock, $10 par200,000 170,000 Paid-in capital in excess of par62,000 60,000 Retained earnings 214,000 176,000 Total liabilities and stockholders’ equity $529,500 $461,000 In addition, assume that equipment costing $125,000 was purchased for cash, and the land was sold for $15,000. The stock was issued for cash, and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Samuel Company’s accumulated depreciation—equipment account increased by $6,000, while patents decreased by $2,200 between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $3,200 from the sale of investments. Assume no changes in noncash current assets and liabilities. Samuel Company reported a net income of $92,000. Determine the net cash flows from (used for) operating activities, using the indirect method.

Q: Kennedy, Inc., reported the following data:Net income$118,000 Depreciation expense15,000 Loss on disposal of equipment(10,000)Gain on sale of building 20,000 Increase in accounts receivable7,000 Decrease in accounts payable(2,000)​Prepare the operating activities section of the statement of cash flows using the indirect method.

Q: Condensed comparative balance sheets of ConnieJo Company at December 31, Years 1 and 2, are as follows: Year 2Year 1Cash$ 45,000 $ 53,500 Accounts receivable (net)51,300 58,000 Inventories147,200 135,000 Investments0 60,000 Equipment493,000 375,000 Accumulated depreciation—equipment(113,700)(128,000)Total assets$622,800 $ 553,500 Accounts payable$ 61,500 $ 42,600 Bonds payable, due Year 40 100,000 Common stock, $10 par250,000 200,000 Paid-in capital in excess of par75,000 50,000 Retained earnings 236,300 160,900 Total liabilities and stockholders’ equity $ 622,800 $553,500 The income statement for Year 2 is as follows:Sales $623,000 Cost of merchandise sold 348,500 Gross profit $274,500 Operating expenses: Depreciation expense$ 24,700 Other operating expenses 75,300 100,000 Income from operations $174,500 Other revenue and expense: Gain on sale of investment$ 5,000 Interest expense (12,000) (7,000)Income before income tax $167,500 Income tax expense 64,100 Net income $103,400 ​Additional data for the current year are as follows:Fully depreciated equipment costing $39,000 was scrapped, no salvage value, and equipment was purchased for $157,000.Bonds payable for $100,000 were retired by payment at their face amount.5,000 shares of common stock were issued at $15 for cash.Cash dividends declared and paid, $28,000.All sales are on account.Prepare a statement of cash flows for the year ending December 31, Year 2, using the direct method of reporting cash flows from operating activities.

Q: Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $8,000, and the inventory balance increased by $21,000 over the year. Determine the amount of cash paid for merchandise.

Q: The board of directors declared cash dividends totaling $168,000 during the year. The comparative balance sheet indicated dividends payable of $46,000 at the beginning of the year and $42,000 at the end of the year. What was the amount of cash paid for dividends during the year?

Q: Condensed comparative balance sheets of Garrett Company at December 31, Years 1 and 2, are as follows: Year 2 Year 1Cash$ 90,000 $ 78,000 Accounts receivable (net)78,000 85,000 Inventories106,500 90,000 Equipment410,000 370,000 Accumulated depreciation (150,000) (158,000)Total assets$ 534,500 $ 465,000 Accounts payable (merchandise creditors)$ 53,500 $ 55,000 Cash dividends payable5,000 4,000 Common stock, $10 par200,000 170,000 Paid-in capital in excess of par62,000 60,000 Retained earnings 214,000 176,000 Total liabilities and stockholders’ equity $534,500 $465,000 In addition, assume that equipment costing $125,000 was purchased for cash, and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared of $18,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Condensed comparative balance sheets for Larson Co. at December 31, Years 1 and 2, appear as follows: Year 2Year 1Cash$ 100,000 $ 78,000 Accounts receivable (net)78,000 85,000 Inventories101,500 90,000 Equipment410,000 370,000 Accumulated depreciation (150,000) (158,000)Total assets$ 539,500 $ 465,000 Accounts payable (merchandise creditors)$ 58,500 $ 55,000 Cash dividends payable5,000 4,000 Common stock, $10 par200,000 170,000 Paid-in capital in excess of par62,000 60,000 Retained earnings 214,000 176,000 Total liabilities and stockholders’ equity $539,500 $465,000 ​In addition to the balance sheet data, assume that:Equipment costing $125,000 was purchased for cash. Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.The stock was issued for cash.The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Condensed comparative balance sheets of Posner Company at December 31, Years 1 and 2, appear as follows: Year 2Year 1Cash$ 53,000 $ 50,000 Accounts receivable (net)37,000 48,000 Inventories108,500 100,000 Investments— 70,000 Equipment573,200 450,000 Accumulated depreciation—equipment (142,000) (176,000)Total assets$ 629,700 $ 542,000 Accounts payable$ 62,500 $ 43,800 Bonds payable, due Year 2— 100,000 Common stock, $10 par335,000 285,000 Paid-in capital in excess of par70,000 55,000 Retained earnings 162,200 58,200 Total liabilities and stockholders’ equity $ 629,700 $ 542,000 The income statement for the current year is as follows:Sales $625,700 Cost of merchandise sold 340,000 Gross profit $285,700 Operating expenses: Depreciation expense$26,000 Other operating expenses 68,000 94,000 Income from operations $191,700 Other revenue and expense: Gain on sale of investment$ 4,000 Interest expense (6,000) (2,000)Income before income tax $189,700 Income tax expense 60,700 Net income $129,000 ​Additional data for the current year are as follows:Fully depreciated equipment costing $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200.Bonds payable for $100,000 were retired by payment at their face amount.5,000 shares of common stock were issued at $13 for cash.Cash dividends declared and paid, $25,000.Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method.

Q: Dickinson Company reported net income of $155,000 for the current year. Depreciation recorded on buildings and equipment amounted to $65,000 for the year. In addition, a building with an original cost of $250,000 and accumulated depreciation of $190,000 on the date of the sale was sold for $75,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of YearBeginning of YearCash$20,000$15,000Accounts Receivable 19,000 32,000Inventories 50,000 65,000Accounts Payable 12,000 18,000​Prepare the operating activities section of the statement of cash flows, using the indirect method.

Q: Selected data taken from the accounting records of Laser Inc. for the current year ended December 31 are as follows: Balance, December 31Balance,January 1Accrued expenses payable$ 5,590$ 6,110Accounts payable (merchandise creditors)41,73046,020Inventories77,35084,110Prepaid expenses3,2503,900During the current year, the cost of merchandise sold was $448,500, and the operating expenses other than depreciation were $78,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.Determine the amount reported on the statement of cash flows for:a. Cash paid for merchandiseb. Cash paid for operating expenses

Q: Selected data for the current year ended December 31 are as follows: BalanceBalance December 31January 1Accrued expenses (operating expenses)$29,500$ 22,000Accounts payable (merchandise creditors)90,000135,000Inventories42,50068,000Prepaid expenses23,00020,000​During the current year, the cost of merchandise sold was $620,000 and the operating expenses other than depreciation were $142,000. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.Determine the amount reported on the statement of cash flows for (a) cash paid for merchandise and (b) cash paid for operating expenses.

Q: The board of directors of Kendall Co. declared cash dividends totaling $390,000 during the current year. The comparative balance sheet indicates dividends payable of $58,000 at the beginning of the year and $73,000 at the end of the year. What was the amount of cash dividends paid during the year?

Q: Match each of the following items to the section (a–d) of the statement of cash flows (indirect method) where it would be reported. Each section may be used more than once, or not at all.a. Operating activities sectionb. Investing activities sectionc. Financing activities sectiond. Schedule of noncash financing and investing activitiesSold equipment at book value

Q: Match each of the following transactions to the section and effect (a–g) on the statement of cash flows. Each option may be used more than once, or not at all.a. Investing activities, cash inflowb. Investing activities, cash outflowc. Financing activities, cash inflowd. Financing activities, cash outflowe. Operating activities, cash inflowf. Operating activities, cash outflowg. Schedule of noncash investing and financing activities, NASold a long-term stock investment for cash at book value

Q: Match each of the following transactions to its effect (a–g) on the statement of cash flows prepared using the indirect method. Each effect may be used more than once, or not at all.a. Increase cash from operating activitiesb. Decrease cash from operating activitiesc. Increase cash from investing activitiesd. Decrease cash from investing activitiese. Increase cash from financing activitiesf. Decrease cash from financing activitiesg. Disclosed as a noncash investing and financing activityDecrease in accounts payable balance

Q: d

Q: Match each of the following items to its treatment (a–c) on the statement of cash flows when determining net cash flows from operating activities by the indirect method.a. Added to net incomeb. Deducted from net incomec. Not included in the operating activities sectionIncrease in income taxes payable

Q: Cash received from the issuance of a mortgage note payable would be classified as a(n) a. investing activity b. operating activity c. noncash investing and financing activity d. financing activity

Q: Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land? a. $173,000 b. $140,000 c. $313,000 d. $33,000

Q: On the statement of cash flows prepared using the indirect method, a $7,500 gain on the sale of fixed assets would be a. added to net income in converting the net income reported on the income statement to cash flows from operating activities b. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities c. added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends d. deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends

Q: On the statement of cash flows, the Cash Flows from (used for) Operating Activities section would include a. cash received from the issuance of capital stock b. cash received from the sale of investments c. cash paid for the acquisition of investments d. cash received from customers

Q: Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash paid for dividends during the year is a. $50,000 b. $40,000 c. $55,000 d. $35,000

Q: Which of the following should be added to net income in computing net cash flows from operating activities using the indirect method? a. an increase in inventory b. a decrease in accounts payable c. preferred dividends declared and paid d. a decrease in accounts receivable

Q: When using the spreadsheet (work sheet) method to analyze noncash accounts, it is best to start with a. Cash b. Accounts Receivable c. Retained Earnings d. Sales

Q: Baxter Company reported a net loss of $13,000 for the year ended December 31. During the year, accounts receivable decreased by $5,000, merchandise inventory increased by $8,000, accounts payable increased by $10,000, and depreciation expense of $4,000 was recorded. During the year, operating activities under the indirect method a. provided net cash of $8,000 b. provided net cash of $2,000 c. used net cash of $8,000 d. used net cash of $2,000

Q: On the statement of cash flows prepared by the indirect method, the operating activities section would include a. receipts from the sale of investments b. gains or losses on fixed assets c. payments for cash dividends d. receipts from the issuance of capital stock

Q: Net income for the year was $45,500. Accounts receivable increased by $5,500, and accounts payable increased by $11,200. Under the indirect method, the net cash flows from operating activities is a. $51,200 b. $45,500 c. $62,200 d. $28,800

Q: Kay owns two annuities that will each pay $500 a month for the next 12 years. One payment is received at the beginning of each month while the other is received at the end of each month. At a discount rate of 7.25 percent, compounded monthly, what is the difference in the present values of these annuities? A. $289.98 B. $265.42 C. $299.01 D. $308.00 E. $312.50