1. Accounts receivable from sales transactions were $49,710 at the beginning of

Question

1. Accounts receivable from sales transactions were $49,710 at the beginning of the year and $62,191 at the end of the year. Net income reported on the income statement for the year was $128,036. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows prepared by the indirect method is

Select the correct answer.

2. Cash dividends of $75,974 were declared during the year. Cash dividends payable were $11,246 and $16,541 at the beginning and end of the year, respectively. Determine the amount of cash for the payment of dividends during the year.

Select the correct answer.

3. The net income reported on the income statement for the current year was $284,011. Depreciation recorded on fixed assets and amortization of patents for the year were $35,619 and $11,137, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Select the correct answer.

4. An investor purchased 541 shares of common stock, $26.00 par, for $46.00. Subsequently, 92 shares were sold for $65.00 per share. What is the amount of gain or loss on the sale (round to two decimal points)?

Select the correct answer.

5. Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Sold $250,000 of bonds at 97. The journal entry for the purchase would include:

6. The current period statement of cash flows includes the flowing:

Find the cash balance at the end of the period.

7. The net income reported on the income statement for the current year was $293,348. Depreciation recorded on fixed assets and amortization of patents for the year were $36,769 and $9,123, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Select the correct answer.

$140,517 $128,036 $115,555 $12,481

2. Cash dividends of $75,974 were declared during the year. Cash dividends payable were $11,246 and $16,541 at the beginning and end of the year, respectively. Determine the amount of cash for the payment of dividends during the year.

Select the correct answer.

$75,974 $64,728 $70,679 $92,515

3. The net income reported on the income statement for the current year was $284,011. Depreciation recorded on fixed assets and amortization of patents for the year were $35,619 and $11,137, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

End Beginning Cash $48,791 $54,537 Accounts receivable $103,761 $120,165 Inventories $87,209 $109,394 Prepaid expenses $6,730 $2,715 Accounts payable (merchandise creditors) $65,131 $57,724

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Select the correct answer.

$369,356 $325,126 $372,748 $293,184

4. An investor purchased 541 shares of common stock, $26.00 par, for $46.00. Subsequently, 92 shares were sold for $65.00 per share. What is the amount of gain or loss on the sale (round to two decimal points)?

Select the correct answer.

$1,748.00 loss $1,748.00 gain $21,099.00 gain $21,099.00 loss

5. Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Sold $250,000 of bonds at 97. The journal entry for the purchase would include:

a. a credit to Interest Revenue for $4,500. b. a debit to Interest Receivable for $4,500. c. a credit to Interest Receivable for $4,500. d. a debit to Interest Revenue for $4,500

6. The current period statement of cash flows includes the flowing:

Cash balance at the beginning of the period $411,722 Cash provided by operating activities $164,043 Cash used in investing activities $57,127 Cash used in financing activities $81,302

Find the cash balance at the end of the period.

$714,194 $437,336 $109,250 -$138,429

7. The net income reported on the income statement for the current year was $293,348. Depreciation recorded on fixed assets and amortization of patents for the year were $36,769 and $9,123, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

End Beginning Cash $46,806 $56,881 Accounts receivable $120,684 $101,721 Inventories $107,165 $92,019 Prepaid expenses $3,793 $6,221 Accounts payable (merchandise creditors) $46,618 $66,310

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

Select the correct answer.

$365,177 $305,131 $287,867 $279,901

Explanation / Answer

Solution :

1

net income

128036

Less : Increase i n accounts receivable

-12481

cash flows from operating activities

115555

2

dividend payable at begining

11246

Less : dividend payable at end

16541

Add : declared during the year

75954

cash for the payment of dividends during the year

70659

3

net income

284011

Add : depreciation

35619

Add : amortisation

11137

Add

decrease in acoounts receivable

16404

Add

decrease in inventory

22185

Less

Increase in prepaid expense

-4015

Add

increase in accounts payable

7407

cash flows from operating activities

372748

4

sale value (92 * 65)

5980

cost (92*46)

4232

Gain

1748

5. Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Sold $250,000 of bonds at 97. The journal entry for the purchase would include:

b. a debit to Interest Receivable for $4,500.

6

Cash provided by operating activities

164043

Cash used in investing activities

57127

Cash used in financing activities

81302

Cash balance at the beginning of the period

411722

Cash balance at the end of the period

714194

7

net income

293348

Add : depreciation

36769

Add : amortisation

9123

Increase in acoounts receivable

-18963

Increase in inventory

-15146

Decrease in prepaid expense

2428

Decrease in accounts payable

-19692

cash flows from operating activities

287867

1

net income

128036

Less : Increase i n accounts receivable

-12481

cash flows from operating activities

115555

2

dividend payable at begining

11246

Less : dividend payable at end

16541

Add : declared during the year

75954

cash for the payment of dividends during the year

70659

3

net income

284011

Add : depreciation

35619

Add : amortisation

11137

Add

decrease in acoounts receivable

16404

Add

decrease in inventory

22185

Less

Increase in prepaid expense

-4015

Add

increase in accounts payable

7407

cash flows from operating activities

372748

4

sale value (92 * 65)

5980

cost (92*46)

4232

Gain

1748

5. Purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Sold $250,000 of bonds at 97. The journal entry for the purchase would include:

b. a debit to Interest Receivable for $4,500.

6

Cash provided by operating activities

164043

Cash used in investing activities

57127

Cash used in financing activities

81302

Cash balance at the beginning of the period

411722

Cash balance at the end of the period

714194

7

net income

293348

Add : depreciation

36769

Add : amortisation

9123

Increase in acoounts receivable

-18963

Increase in inventory

-15146

Decrease in prepaid expense

2428

Decrease in accounts payable

-19692

cash flows from operating activities

287867

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