Filters
Question type
Study Flashcards

Freeport Corporation's income statement for last year appears below: The beginning and ending balances for last year are available for the following selected accounts (the company did not dispose of any property,plant,and equipment during the year): Required: Using the direct method,prepare in good form the operating activities section of the statement of cash flows.

Correct Answer

verifed

verified

Under the direct method of determining the net cash provided by operating activities on the statement of cash flows,one step in adjusting selling and administrative expenses from an accrual to a cash basis is to subtract any increase in prepaid expenses.

A) True
B) False

Correct Answer

verifed

verified

Kuma,Inc.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) ?  Ending Beginning  Cash.................... $59,000$45,000 Accounts receivable....... $75,000$81,000 Inventory ................. $36,000$42,000 Accounts payable ......... $18,000$14,000 Retained earnings........ $79,000$64,000\begin{array}{lcc}&\text { Ending}&\text { Beginning }\\\text { Cash.................... } & \$ 59,000 & \$ 45,000 \\\text { Accounts receivable....... } & \$ 75,000 & \$ 81,000 \\\text { Inventory ................. } & \$ 36,000 & \$ 42,000 \\\text { Accounts payable ......... } & \$ 18,000 & \$ 14,000 \\\text { Retained earnings........ } & \$ 79,000 & \$ 64,000\end{array}


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

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

Correct Answer

verifed

verified

Crossland Corporation reported sales on its income statement of $435,000.On the statement of cash flows,which used the direct method,sales adjusted to a cash basis were $455,000.Crossland Corporation reported the following account balances on its statement of financial position for the year: Based on this information,the beginning balance in accounts receivable was:  Ending Balance Beginning Balance  Accounts receivable...... $30,000? Prepaid expenses........ $14,000$11,000 Inventory.............. $18,000$20,000\begin{array}{lcc}&\text { Ending Balance}&\text { Beginning Balance }\\\text { Accounts receivable...... } & \$ 30,000 & ? \\\text { Prepaid expenses........ } & \$ 14,000 & \$ 11,000 \\\text { Inventory.............. } & \$ 18,000 & \$ 20,000\end{array}


A) $50,000
B) $40,000
C) $30,000
D) $20,000

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

Correct Answer

verifed

verified

Sales reported on the income statement totaled $750,000.The beginning balance in accounts receivable was $70,000.The ending balance in accounts receivable was $80,000.Under the direct method of determining the net cash provided by operating activities on the statement of cash flows,sales adjusted to a cash basis are:


A) $760,000
B) $740,000
C) $680,000
D) $830,000

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

Correct Answer

verifed

verified

Last year Anderson Corporation reported a cost of goods sold of $100,000.The company's inventory at the beginning of the year was $11,000,and its inventory at the end of the year was $19,000.The prepaid expense account increased by $2,000 between the beginning and end of the year,and the accounts payable account decreased by $4,000.Cost of goods sold adjusted to the cash basis under the direct method would be:


A) $94,000
B) $106,000
C) $112,000
D) $110,000

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

Correct Answer

verifed

verified

Learning Objective: 1 -The net cash provided by (used in) financing activities for the year was:


A) $(42)
B) $3
C) $11
D) $(28)

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

Correct Answer

verifed

verified

Comparative statement of financial position and the income statement for Ellis Corporation are presented below: The following additional information is available for the year: * During the year,the company sold long-term investments for $35,500 that had been purchased for $38,000. * The company did not sell any property,plant,and equipment during the year or repurchase any of its own common stock. * All sales were on credit. * The company paid a cash dividend of $25,000. * The company paid cash to retire $15,000 of bonds payable. Required: a.Using the indirect method,determine the net cash provided by operating activities. b.Using the direct method,determine the net cash provided by operating activities. c.Using the net cash provided by operating activities amount from either part a or b,prepare a statement of cash flows.

Correct Answer

verifed

verified

The change in each of Kendall Corporation's statement of financial position 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 operating activities on the statement of cash flows is determined using the direct method.  Statement of Financial Position Increase Decrease$′000$′000 Assets  Property, plant and equipment 10 Acoumulated depreciation 8 Long-term investment 15 Acoounts receivable 2 Inventory 3 Prepaid expenses 4 Cash and cash equivalents 3Equity and Liabilities  Common stock 5 Retained earnings 4Bonds payable 13Accounts payable 9Accrued liabilities 6\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^′000&\$^′000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}  Income Statement $′000 Revenue 300 Cost of goods sold 180‾ Gross margin 120 Selling and administrative expens 116‾ Net inoome 4‾\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^′000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array} -The net cash provided (used) by financing activities would be:


A) $(8,000)
B) $(13,000)
C) $20,000
D) $(3,000)

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

Correct Answer

verifed

verified

Van Beeber Corporation's comparative statement of financial position and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year.It did not sell or retire any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities. Van Beeber Corporation's comparative statement of financial position and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year.It did not sell or retire any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities. -On the statement of cash flows,the sales adjusted to a cash basis would be: A) $700,000 B) $688,000 C) $677,000 D) $712,000 -On the statement of cash flows,the sales adjusted to a cash basis would be:


A) $700,000
B) $688,000
C) $677,000
D) $712,000

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

Correct Answer

verifed

verified

Evita Corporation prepares its statement of cash flows using the indirect method.Evita's statement showed "Net cash provided by operating activities" of $46,000.Under the direct method,this number would have been:


A) $0.
B) $46,000.
C) greater than $46,000.
D) less than $46,000 but greater than $0.

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

Correct Answer

verifed

verified

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.  Ending  Beginning  Cash................. $42,000$31,000 Accounts receivable....... $87,000$72,000 Inventory ................ $96,000$83,000 Accounts payable ....... $23,000$29,000\begin{array} { l r r } & \begin{array} { c } \text { Ending }\end{array} & \text { Beginning } \\\text { Cash................. } & \$ 42,000 & \$ 31,000 \\\text { Accounts receivable....... } & \$ 87,000 & \$ 72,000 \\\text { Inventory ................ } & \$ 96,000 & \$ 83,000 \\\text { Accounts payable ....... } & \$ 23,000 & \$ 29,000\end{array} -On its statement of cash flows,what amount should Howard show for its net sales adjusted to a cash basis (i.e. ,cash received from sales) ?


A) $616,000
B) $623,000
C) $625,000
D) $595,000

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

Correct Answer

verifed

verified

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.  Ending  Beginning  Cash................. $42,000$31,000 Accounts receivable....... $87,000$72,000 Inventory ................ $96,000$83,000 Accounts payable ....... $23,000$29,000\begin{array} { l r r } & \begin{array} { c } \text { Ending }\end{array} & \text { Beginning } \\\text { Cash................. } & \$ 42,000 & \$ 31,000 \\\text { Accounts receivable....... } & \$ 87,000 & \$ 72,000 \\\text { Inventory ................ } & \$ 96,000 & \$ 83,000 \\\text { Accounts payable ....... } & \$ 23,000 & \$ 29,000\end{array} -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) None of the above
F) B) and D)

Correct Answer

verifed

verified

Reven Corporation prepares its statement of cash flows using the direct method.Last year,Reven reported Income Tax Expense of $25,000.At the beginning of last year,Reven had a $5,000 balance in the Income Taxes Payable account.At the end of last year,Reven had a $9,000 balance in the account.On its statement of cash flows for last year,what amount should Reven have shown for its Income Tax Expense adjusted to a cash basis (i.e. ,income taxes paid) ?


A) $29,000
B) $21,000
C) $25,000
D) $4,000

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

Correct Answer

verifed

verified

The most recent statement of financial position and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was: The most recent statement of financial position and income statement of Dallavalle Corporation appear below: Cash dividends were $12.The company did not retire or sell any property,plant,and equipment during the year.The net cash provided by (used in) operating activities for the year was: A) $77 B) $68 C) $40 D) $14


A) $77
B) $68
C) $40
D) $14

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

Correct Answer

verifed

verified

Dorris Corporation's statement of financial position 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: Dorris Corporation's statement of financial position 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


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

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

Correct Answer

verifed

verified

Kilduff Corporation's statement of financial position and income statement appear below: The company sold equipment for $19 that was originally purchased for $10 and that had accumulated depreciation of $5.The company paid a cash dividend of $44 and it did not issue any bonds payable or repurchase any of its own common stock. Kilduff Corporation's statement of financial position and income statement appear below: The company sold equipment for $19 that was originally purchased for $10 and that had accumulated depreciation of $5.The company paid a cash dividend of $44 and it did not issue any bonds payable or repurchase any of its own common stock. -The net cash provided by (used in) investing activities for the year was: A) $19 B) $(118) C) $(137) D) $118 -The net cash provided by (used in) investing activities for the year was:


A) $19
B) $(118)
C) $(137)
D) $118

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

Correct Answer

verifed

verified

Van Beeber Corporation's comparative statement of financial position and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year.It did not sell or retire any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities. Van Beeber Corporation's comparative statement of financial position and income statement for last year appear below: The company declared and paid $49,000 in cash dividends during the year.It did not sell or retire any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities. -On the statement of cash flows,the income tax expense adjusted to a cash basis would be: A) $39,000 B) $69,000 C) $9,000 D) $25,000 -On the statement of cash flows,the income tax expense adjusted to a cash basis would be:


A) $39,000
B) $69,000
C) $9,000
D) $25,000

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

Correct Answer

verifed

verified

During the year the balance in the Prepaid Expenses account increased by $6,000.In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows,it would be necessary to:


A) subtract the $6,000 from the selling and administrative expenses reported on the income statement.
B) add the $6,000 to the selling and administrative expenses reported on the income statement.
C) subtract the $6,000 from the cost of goods sold reported on the income statement.
D) add the $6,000 to the cost of goods sold reported on the income statement.

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

Correct Answer

verifed

verified

The change in each of Kendall Corporation's statement of financial position 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 operating activities on the statement of cash flows is determined using the direct method.  Statement of Financial Position Increase Decrease$′000$′000 Assets  Property, plant and equipment 10 Acoumulated depreciation 8 Long-term investment 15 Acoounts receivable 2 Inventory 3 Prepaid expenses 4 Cash and cash equivalents 3Equity and Liabilities  Common stock 5 Retained earnings 4Bonds payable 13Accounts payable 9Accrued liabilities 6\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^′000&\$^′000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}  Income Statement $′000 Revenue 300 Cost of goods sold 180‾ Gross margin 120 Selling and administrative expens 116‾ Net inoome 4‾\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^′000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array} -Using the direct method,the cost of goods sold adjusted to a cash basis would be:


A) $180,000
B) $174,000
C) $177,000
D) $186,000

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

Correct Answer

verifed

verified

Showing 21 - 40 of 56

Related Exams

Exam 1

Absorption Costing and Variable Costing

28 Questions

Exam 3

Further Classification of Labor Costs

18 Questions

Exam 4

Cost of Quality

24 Questions

Exam 5

Least-Squares Regression Computations

22 Questions

Exam 6

Absorption Costing and Variable Costing

38 Questions

Exam 7

Abc Action Analysis

16 Questions

Exam 8

Use Activity-Based Costing Technique to Compute Product Costs for External Reports

16 Questions

Exam 9

Fifo Method

72 Questions

Exam 10

Compute and Interpret the Fixed Overhead Variances

87 Questions

Exam 11

Journal Entries to Record Variances

46 Questions

Exam 12

Transfer Pricing

18 Questions

Exam 13

The Concept of Present Value

14 Questions

Exam 14

Income Taxes in Capital Budgeting Decisions

33 Questions

Exam 15

Pricing Products and Services

84 Questions

Exam 16

Profitability Analysis

76 Questions

Show Answer