Question 1

The ending balance of accounts receivable was $69,000.Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $354,000.Sales reported on the income statement were $378,000.Based on this information, the beginning balance in accounts receivable was:

Accepted Answer

A)  $93,000
B)  $24,000
C)  $94,000
D)  $45,000E) A) and D)
F) A) and B)

Question 2

Wister Corporation had sales of $462,000 for the just completed year.Shown below are the beginning and ending balances of various Wister accounts:  Wister prepares its statement of cash flows using the direct method.On its statement of cash flows, what amount should Wister show for its sales adjusted to a cash basis (i.e., cash received from sales) ?

Accepted Answer

A)  $488,000
B)  $436,000
C)  $462,000
D)  $445,000E) C) and D)
F) A) and D)

Question 3

Under the direct method of determining the net cash provided by (used in)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.

Accepted Answer

A) True 
 B)False

Question 4

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) ?

Accepted Answer

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

Question 5

The net cash provided by (used in) investing activities for the year was:

Accepted Answer

A)  $(127) 
B)  $(138) 
C)  $138
D)  $127E) A) and C)
F) A) and B)

Question 6

Maloney Corporation's balance sheet and income statement appear below:   Cash dividends were $42.The company did not dispose of any property, plant, and equipment during the year.

Required:
Prepare the operating activities section of the statement of cash flows using the direct method.

Accepted Answer

The answer of Maloney Corporation's balance sheet and income statement...

Question 7

The net cash provided by (used in) investing activities would be:

Accepted Answer

A)  $15,000
B)  $(10,000) 
C)  $(8,000) 
D)  $5,000E) B) and D)
F) B) and C) D

Question 8

Carson Corporation's comparative balance sheet and income statement for last year appear below:   Carson did not dispose of any property, plant, and equipment during the year.It constructs its statement of cash flows using the direct method.

Required:
Using the direct method, prepare in good form the operating activities section of the statement of cash flows.

Accepted Answer

The answer of Carson Corporation's comparative balance sheet and income...

Question 9

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

Accepted Answer

A)  $(42) 
B)  $3
C)  $11
D)  $(28) E) None of the above
F) All of the above

Question 10

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:

Accepted Answer

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

Question 11

Carr Corporation's comparative balance sheet and income statement for last year appear below:   The company declared and paid $47,000 in cash dividends during the year.It did not dispose of any property, plant, and equipment during the year.

Required:
Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

Accepted Answer

The answer of Carr Corporation's comparative balance sheet and income...

Question 12

On the statement of cash flows, the income tax expense adjusted to a cash basis would be:

Accepted Answer

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

Question 13

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) ?

Accepted Answer

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

Question 14

Under the direct method, cost of goods sold adjusted to a cash basis would be:

Accepted Answer

A)  $105,000
B)  $125,000
C)  $175,000
D)  $155,000E) All of the above
F) A) and D)

Question 15

On the statement of cash flows, the selling and administrative expense adjusted to a cash basis would be:

Accepted Answer

A)  $304,000
B)  $384,000
C)  $310,000
D)  $236,000E) A) and B)
F) None of the above

Question 16

The net cash provided by (used in) investing activities for the year was:

Accepted Answer

A)  $19
B)  $(118) 
C)  $(137) 
D)  $118E) B) and D)
F) All of the above

Question 17

Digby Corporation's balance sheet and income statement appear below:   Cash dividends were $29.The company did not dispose of any property, plant, and equipment during the year.

Required:
Prepare the operating activities section of the statement of cash flows in good form using the direct method.

Accepted Answer

The answer of Digby Corporation's balance sheet and income statement...

Question 18

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

Accepted Answer

A)  $0.
B)  $46,000.
C)  greater than $46,000.
D)  less than $46,000 but greater than $0.E) None of the above
F) A) and D)

Question 19

Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows, an increase in accounts receivable would be added to sales revenue to convert revenue to a cash basis.

Accepted Answer

A) True 
 B)False

Question 20

The net cash provided by (used in) operating activities for the year was:

Accepted Answer

A)  $187
B)  $231
C)  $257 
D)  $201E) A) and C)
F) A) and B)

Exam 21: A Statement of Cash Flows

The ending balance of accounts receivable was $69,000.Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $354,000.Sales reported on the income statement were $378,000.Based on this information, the beginning balance in accounts receivable was:

Correct Answer
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Under the direct method of determining the net cash provided by (used in)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.

Correct Answer
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The net cash provided by (used in) investing activities for the year was:

Correct Answer
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Maloney Corporation's balance sheet and income statement appear below: Cash dividends were $42.The company did not dispose of any property, plant, and equipment during the year. Required: Prepare the operating activities section of the statement of cash flows using the direct method.

Correct Answer
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The net cash provided by (used in) investing activities would be:

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D

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

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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:

Correct Answer
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On the statement of cash flows, the income tax expense adjusted to a cash basis would be:

Correct Answer
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C

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) ?

Correct Answer
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C

Under the direct method, cost of goods sold adjusted to a cash basis would be:

Correct Answer
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On the statement of cash flows, the selling and administrative expense adjusted to a cash basis would be:

Correct Answer
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The net cash provided by (used in) investing activities for the year was:

Correct Answer
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Digby Corporation's balance sheet and income statement appear below: Cash dividends were $29.The company did not dispose of any property, plant, and equipment during the year. Required: Prepare the operating activities section of the statement of cash flows in good form using the direct method.

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

Correct Answer
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Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows, an increase in accounts receivable would be added to sales revenue to convert revenue to a cash basis.

Correct Answer
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The net cash provided by (used in) operating activities for the year was:

Correct Answer
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Exam 21: A Statement of Cash Flows

The ending balance of accounts receivable was $69,000.Sales, adjusted to a cash basis using the direct method on the statement of cash flows, were $354,000.Sales reported on the income statement were $378,000.Based on this information, the beginning balance in accounts receivable was:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Under the direct method of determining the net cash provided by (used in)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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The net cash provided by (used in) investing activities for the year was:

Correct AnswerverifiedShow Answer

Maloney Corporation's balance sheet and income statement appear below: Cash dividends were $42.The company did not dispose of any property, plant, and equipment during the year. Required: Prepare the operating activities section of the statement of cash flows using the direct method.

Correct AnswerverifiedShow Answer

The net cash provided by (used in) investing activities would be:

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

On the statement of cash flows, the income tax expense adjusted to a cash basis would be:

Correct AnswerverifiedC

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) ?

Correct AnswerverifiedC

Under the direct method, cost of goods sold adjusted to a cash basis would be:

Correct AnswerverifiedShow Answer

On the statement of cash flows, the selling and administrative expense adjusted to a cash basis would be:

Correct AnswerverifiedShow Answer

The net cash provided by (used in) investing activities for the year was:

Correct AnswerverifiedShow Answer

Digby Corporation's balance sheet and income statement appear below: Cash dividends were $29.The company did not dispose of any property, plant, and equipment during the year. Required: Prepare the operating activities section of the statement of cash flows in good form using the direct method.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows, an increase in accounts receivable would be added to sales revenue to convert revenue to a cash basis.

Correct AnswerverifiedShow Answer

The net cash provided by (used in) operating activities for the year was:

Correct AnswerverifiedShow Answer

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D

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C

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C

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