Question 1

Which of the following is a correct statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?

Accepted Answer

A)   All noncash expenses and losses are subtracted from net income.
B)   Increases in current liabilities are added to net income.
C)   Increases in current assets are added to net income.
D)   Decreases in current assets are subtracted from net income.E) None of the above
F) B) and D)

Question 2

For the year ended December 31,Year 1,Carsem Company had cash collections from customers of $220,000,cash paid to employees of $32,000,cash paid to suppliers of $100,000,cash used to retire long-term bonds of $32,000,and cash payments for dividends of $20,000.Based on this information,what is the net cash provided from operating activities?

Accepted Answer

A)   $68,000
B)   $88,000
C)   $188,000
D)   $120,000E) All of the above
F) A) and B)

Question 3

Valdez Co.sold land that had cost $48,000 for $60,000 cash.Which of the following statements is true about this transaction?

Accepted Answer

A)   The $12,000 gain would be subtracted from net income in the operating activities section using the direct method.
B)   $48,000 would appear as a cash inflow from investing activities and $12,000 would be added in the operating activities section using the indirect method.
C)   $60,000 would appear as a cash inflow from investing activities.
D)   The $12,000 gain would be subtracted from net income in the operating activities section prepared using the indirect method and $60,000 would be reported as a cash inflow from investing activities.E) A) and D)
F) A) and C)

Question 4

Belvedere Corporation had a balance in its Equipment account on January 1,Year 2 of $320,000.During the year,equipment originally costing $85,000 and having Accumulated Depreciation of $20,000 was sold for $67,000.The ending balance of the Equipment Account was $275,000.How much did the company spend to purchase additional equipment during Year 2?

Accepted Answer

A)   $40,000
B)   $25,000
C)   $90,000
D)   $92,000E) A) and B)
F) B) and D)

Question 5

Goodloe Corporation's credit sales for Year 1 were $500,000,and the balance in its accounts receivable increased by $26,000 during the year.In Year 1,Goodloe collected $526,000 in cash from its customers.

Accepted Answer

A) True 
 B)False

Exam 12: Statement of Cash Flows

Valdez Co.sold land that had cost $48,000 for $60,000 cash.Which of the following statements is true about this transaction?

Correct Answer
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Correct Answer
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Which of the following is a correct statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?

Correct Answer
verified

Correct Answer
verified

Goodloe Corporation's credit sales for Year 1 were $500,000,and the balance in its accounts receivable increased by $26,000 during the year.In Year 1,Goodloe collected $526,000 in cash from its customers.

Correct Answer
verified

Exam 12: Statement of Cash Flows

Valdez Co.sold land that had cost $48,000 for $60,000 cash.Which of the following statements is true about this transaction?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a correct statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Goodloe Corporation's credit sales for Year 1 were $500,000,and the balance in its accounts receivable increased by $26,000 during the year.In Year 1,Goodloe collected $526,000 in cash from its customers.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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