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An increase in the Inventory account from $10,000 at the beginning of the year to $15,000 at the end of the year would be shown on the statement of cash flows prepared under the indirect method as:


A) an addition to net income of $5,000 in order to arrive at net cash provided by operating activities.
B) a deduction from net income of $5,000 in order to arrive at net cash provided by operating activities.
C) an addition to net income of $15,000 in order to arrive at net cash provided by operating activities.
D) a deduction from net income of $10,000 in order to arrive at net cash provided by operating activities.

E) A) and D)
F) All of the above

Correct Answer

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The following events occurred last year for the Cart Corporation: The following events occurred last year for the Cart Corporation: Based solely on the above information, the net cash provided by (used in) financing activities for the year on the statement of cash flows was: A) $12,000 B) $24,000 C) $20,000 D) $49,000 Based solely on the above information, the net cash provided by (used in) financing activities for the year on the statement of cash flows was:


A) $12,000
B) $24,000
C) $20,000
D) $49,000

E) A) and B)
F) A) and C)

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Marbry Corporation's balance sheet and income statement appear below: Marbry Corporation's balance sheet and income statement appear below: A) $(11) B) $(43) C) $40 D) $8


A) $(11)
B) $(43)
C) $40
D) $8

E) None of the above
F) B) and C)

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Hayward Corporation had net sales of $610,000 and cost of goods sold of $360,000 for the just completed year. Shown below are the beginning and ending balances for the year of various accounts: Hayward Corporation had net sales of $610,000 and cost of goods sold of $360,000 for the just completed year. Shown below are the beginning and ending balances for the year of various accounts: The company prepares its statement of cash flows using the direct method.On its statement of cash flows, what amount should Howard show for its cost of goods sold adjusted to a cash basis (i.e., cash paid to suppliers) ? A) $345,000 B) $366,000 C) $379,000 D) $373,000 The company prepares its statement of cash flows using the direct method.On its statement of cash flows, what amount should Howard show for its cost of goods sold adjusted to a cash basis (i.e., cash paid to suppliers) ?


A) $345,000
B) $366,000
C) $379,000
D) $373,000

E) B) and D)
F) B) and C)

Correct Answer

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An increase in accounts receivable of $1,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:


A) an addition to net income of $1,000 in order to arrive at net cash provided by operating activities.
B) a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
C) an addition of $1,000 under financing activities.
D) a deduction of $1,000 under financing activities.

E) All of the above
F) None of the above

Correct Answer

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Kuma, Incorporated had cost of goods sold of $106,000 for the just completed year. Shown below are the beginning and ending balances of various Kuma accounts: Kuma, Incorporated had cost of goods sold of $106,000 for the just completed year. Shown below are the beginning and ending balances of various Kuma accounts: Kuma prepares its statement of cash flows using the direct method. On its statement of cash flows, what amount should Kuma show for its cost of goods sold adjusted to a cash basis (i.e., cash paid to suppliers) ? A) $100,000 B) $96,000 C) $102,000 D) $116,000 Kuma prepares its statement of cash flows using the direct method. On its statement of cash flows, what amount should Kuma show for its cost of goods sold adjusted to a cash basis (i.e., cash paid to suppliers) ?


A) $100,000
B) $96,000
C) $102,000
D) $116,000

E) B) and C)
F) A) and C)

Correct Answer

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Illies Corporation's comparative balance sheet appears below: Illies Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by (used in) operating activities and net cash provided by (used in) financing activities are: A) net cash provided by (used in) operating activities, $33,000; net cash provided by (used in) financing activities, $(1,000) B) net cash provided by (used in) operating activities, $35,000; net cash provided by (used in) financing activities, $(7,000) C) net cash provided by (used in) operating activities, $33,000; net cash provided by (used in) financing activities, $(7,000) D) net cash provided by (used in) operating activities, $35,000; net cash provided by (used in) financing activities, $(1,000) The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by (used in) operating activities and net cash provided by (used in) financing activities are:


A) net cash provided by (used in) operating activities, $33,000; net cash provided by (used in) financing activities, $(1,000)
B) net cash provided by (used in) operating activities, $35,000; net cash provided by (used in) financing activities, $(7,000)
C) net cash provided by (used in) operating activities, $33,000; net cash provided by (used in) financing activities, $(7,000)
D) net cash provided by (used in) operating activities, $35,000; net cash provided by (used in) financing activities, $(1,000)

E) A) and D)
F) None of the above

Correct Answer

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Buckley Corporation's most recent comparative balance sheet appears below: Buckley Corporation's most recent comparative balance sheet appears below: 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.The net cash provided by (used in) operating activities for the year was: A) $32 B) $59 C) $130 D) $150 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.The net cash provided by (used in) operating activities for the year was:


A) $32
B) $59
C) $130
D) $150

E) B) and C)
F) A) and D)

Correct Answer

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Majorn Auto Parts Store had net income of $81,000 for the year just ended. Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn Auto Parts Store had net income of $81,000 for the year just ended. Majorn collected the following additional information to prepare its statement of cash flows for the year: Majorn uses the indirect method to prepare its statement of cash flows. What is Majorn's net cash provided by (used in) operating activities? A) $41,000 B) $(53,000) C) $185,000 D) $279,000 Majorn uses the indirect method to prepare its statement of cash flows. What is Majorn's net cash provided by (used in) operating activities?


A) $41,000
B) $(53,000)
C) $185,000
D) $279,000

E) C) and D)
F) A) and B)

Correct Answer

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Swinger Corporation's comparative balance sheet appears below: Swinger Corporation's comparative balance sheet appears below: The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $10,000. The net cash provided by (used in) operating activities is: A) $32,000 B) $36,000 C) $34,000 D) $28,000 The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $10,000. The net cash provided by (used in) operating activities is:


A) $32,000
B) $36,000
C) $34,000
D) $28,000

E) A) and D)
F) A) and C)

Correct Answer

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The change in each of Kendall Corporation's balance sheet accounts last year follows: The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method.The selling and administrative expense adjusted to a cash basis would be: A) $120,000 B) $106,000 C) $110,000 D) $112,000 Kendall Corporation's income statement for the year was: The change in each of Kendall Corporation's balance sheet accounts last year follows: Kendall Corporation's income statement for the year was: There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method.The selling and administrative expense adjusted to a cash basis would be: A) $120,000 B) $106,000 C) $110,000 D) $112,000 There were no sales or retirements of property, plant, and equipment and no dividends paid during the year. The company pays no income taxes and it did not purchase any long-term investments, issue any bonds payable, or repurchase any of its own common stock. The net cash provided by (used in) operating activities on the statement of cash flows is determined using the direct method.The selling and administrative expense adjusted to a cash basis would be:


A) $120,000
B) $106,000
C) $110,000
D) $112,000

E) A) and B)
F) C) and D)

Correct Answer

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McCorey Corporation recorded the following events last year: McCorey Corporation recorded the following events last year: On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities.Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be: A) $110,000 B) $55,000 C) $150,000 D) $130,000 On the statement of cash flows, some of these events are classified as operating activities, some are classified as investing activities, and some are classified as financing activities.Based solely on the information above, the net cash provided by (used in) investing activities on the statement of cash flows would be:


A) $110,000
B) $55,000
C) $150,000
D) $130,000

E) A) and B)
F) A) and C)

Correct Answer

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Belk Corporation's balance sheet appears below: Belk Corporation's balance sheet appears below: The net income for the year was $126. Cash dividends were $21. The company did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year.Required:Prepare a statement of cash flows in good form using the indirect method. The net income for the year was $126. Cash dividends were $21. The company did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year.Required:Prepare a statement of cash flows in good form using the indirect method.

Correct Answer

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Frankin Corporation's net cash provided by operating activities was $190; its capital expenditures were $83; and its cash dividends were $40. The company's free cash flow was:


A) $67
B) $107
C) $313
D) $150

E) A) and D)
F) All of the above

Correct Answer

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Paying taxes to governmental bodies is considered a cash outflow in the operating activities section on the statement of cash flows.

A) True
B) False

Correct Answer

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LFM Corporation reported cost of goods sold on its income statement of $15,000. The following account balances appeared on the company's comparative balance sheet for the same year: LFM Corporation reported cost of goods sold on its income statement of $15,000. The following account balances appeared on the company's comparative balance sheet for the same year: The company uses the direct method to determine the net cash provided by (used in) operating activities. The cost of goods sold, adjusted to a cash basis, on the company's statement of cash flows for the year would be: A) $14,000 B) $16,000 C) $10,000 D) $15,000 The company uses the direct method to determine the net cash provided by (used in) operating activities. The cost of goods sold, adjusted to a cash basis, on the company's statement of cash flows for the year would be:


A) $14,000
B) $16,000
C) $10,000
D) $15,000

E) A) and B)
F) A) and C)

Correct Answer

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Walmouth Corporation's comparative balance sheet and income statement for last year appear below: Walmouth Corporation's comparative balance sheet and income statement for last year appear below: The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.The net cash provided by (used in) investing activities last year was: A) $30,000 B) $(30,000) C) $(40,000) D) $40,000 The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.The net cash provided by (used in) investing activities last year was:


A) $30,000
B) $(30,000)
C) $(40,000)
D) $40,000

E) A) and B)
F) B) and C)

Correct Answer

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Dorris Corporation's balance sheet and income statement appear below: Dorris Corporation's balance sheet and income statement appear below: Cash dividends were $7. The company sold equipment for $18 that was originally purchased for $8 and that had accumulated depreciation of $6. The net cash provided by (used in) operating activities for the year was: A) $34 B) $35 C) $50 D) $41 Cash dividends were $7. The company sold equipment for $18 that was originally purchased for $8 and that had accumulated depreciation of $6. The net cash provided by (used in) operating activities for the year was:


A) $34
B) $35
C) $50
D) $41

E) B) and D)
F) All of the above

Correct Answer

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Hirshberg Corporation's comparative balance sheet appears below: Hirshberg Corporation's comparative balance sheet appears below: The company's net income for the year was $11,000 and its cash dividends were $4,000. It did not sell or retire any property, plant, and equipment during the year.The company's net cash provided by (used in) operating activities is: A) $48,000 B) $18,000 C) $40,000 D) $52,000 The company's net income for the year was $11,000 and its cash dividends were $4,000. It did not sell or retire any property, plant, and equipment during the year.The company's net cash provided by (used in) operating activities is:


A) $48,000
B) $18,000
C) $40,000
D) $52,000

E) A) and B)
F) All of the above

Correct Answer

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Degeare Corporation's balance sheet and income statement appear below: Degeare Corporation's balance sheet and income statement appear below: Cash dividends were $10. The company sold equipment for $18 that was originally purchased for $10 and that had accumulated depreciation of $5. The net cash provided by (used in) operating activities for the year was: A) $73 B) $76 C) $43 D) $63 Cash dividends were $10. The company sold equipment for $18 that was originally purchased for $10 and that had accumulated depreciation of $5. The net cash provided by (used in) operating activities for the year was:


A) $73
B) $76
C) $43
D) $63

E) A) and B)
F) None of the above

Correct Answer

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