loader  Loading... Please wait...

Question(s) / Instruction(s):

35.     On the statement of cash flows (indirect method), the receipts from insurance companies should
          a.     be shown as an addition to net income of $350,000.
          b.     be shown as an inflow from investing activities of $350,000.
          c.     be shown as an inflow from investing activities of $500,000.
          d.     not be shown.

     36.     On the statement of cash flows (indirect method), the flood loss should
          a.     be shown as an addition to net income of $105,000.
          b.     be shown as an addition to net income of $150,000.
          c.     be shown as an inflow from investing activities of $105,000.
          d.     not be shown.

Use the following information for questions 37 and 38.

Lange Co. provided the following information on selected transactions during 2004:
          Purchase of land by issuing bonds     $150,000
          Proceeds from issuing bonds     300,000
          Purchases of inventory     570,000
          Purchases of treasury stock     90,000
          Loans made to affiliated corporations     210,000
          Dividends paid to preferred stockholders     60,000
          Proceeds from issuing preferred stock     240,000
          Proceeds from sale of equipment     30,000

     37.     The net cash provided (used) by investing activities during 2004 is
          a.     $30,000.
          b.     $(180,000).
          c.     $(330,000).
          d.     $(750,000).

     38.     The net cash provided by financing activities during 2004 is
          a.     $330,000.
          b.     $390,000.
          c.     $480,000.
          d.     $540,000.


Use the following information for questions 39 through 41.

The balance sheet data of Paxon Company at the end of 2004 and 2003 follow:
           2004           2003     
Cash          $ 125,000     $ 175,000
Accounts receivable (net)     300,000     225,000
Merchandise inventory     350,000     225,000
Prepaid expenses     50,000     125,000
Buildings and equipment     450,000     375,000
Accumulated depreciation—buildings and equipment     (90,000)     (40,000)
Land           450,000      200,000
     Totals     $1,635,000     $1,285,000

Accounts payable     $ 340,000     $ 275,000
Accrued expenses     60,000     90,000
Notes payable—bank, long-term          200,000
Mortgage payable     150,000
Common stock, $10 par     1,045,000     795,000
Retained earnings (deficit)      40,000      (75,000)
          $1,635,000     $1,285,000
Land was acquired for $250,000 in exchange for common stock, par $250,000, during the year; all equipment purchased was for cash. Equipment costing $25,000 was sold for $10,000; book value of the equipment was $20,000 and the loss was reported as an ordinary item in net income. Cash dividends of $50,000 were charged to retained earnings and paid during the year; the transfer of net income to retained earnings was the only other entry in the Retained Earnings account. In the statement of cash flows for the year ended December 31, 2004, for Paxon Company:

     39.     The net cash provided by operating activities was
          a.     $130,000.
          b.     $165,000.
          c.     $140,000.
          d.     $120,000.

     40.     The net cash provided (used) by investing activities was
          a.     $65,000.
          b.     $(100,000).
          c.     $(340,000).
          d.     $(90,000).

     41.     The net cash provided (used) by financing activities was
          a.     $ -0-.
          b.     $(50,000).
          c.     $(100,000).
          d.     $150,000.

     42.     The following information on selected cash transactions for 2004 has been provided by Raymond Company:
               Proceeds from sale of land     $ 400,000
               Proceeds from long-term borrowings     1,000,000
               Purchases of plant assets     360,000
               Purchases of inventories     1,700,000
               Proceeds from sale of Raymond common stock     600,000
     42.     (cont.)
          What is the cash provided (used) by investing activities for the year ended December 31, 2004, as a result of the above information?
          a.     $40,000
          b.     $640,000.
          c.     $400,000.
          d.     $2,000,000.

     43.     Selected information from Benton Company's 2004 accounting records is as follows:
               Proceeds from issuance of common stock     $ 500,000
               Proceeds from issuance of bonds     1,500,000
               Cash dividends on common stock paid     200,000
               Cash dividends on preferred stock paid     75,000
               Purchases of treasury stock     150,000
               Sale of stock to officers and employees not included above     125,000
          Benton's statement of cash flows for the year ended December 31, 2004, would show net cash provided (used) by financing activities of
          a.     $75,000.
          b.     $(275,000).
          c.     $200,000.
          d.     $1,700,000.

     44.     Snow Incorporated, had net income for 2004 of $7,000,000. Additional information is as follows:
               Amortization of patents     $ 60,000
               Depreciation on plant assets     2,200,000
               Long-term debt:
                    Bond premium amortization     90,000
                    Interest paid     1,200,000
               Provision for doubtful accounts:
                    Current receivables     110,000
                    Long-term nontrade receivables     40,000
          What should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2004, based solely on the above information?
          a.      $9,430,000.
          b.     $9,500,000.
          c.     $9,320,000.
          d.     $9,460,000.

     45.     The net income for the year ended December 31, 2004, for Unger Company was $900,000. Additional information is as follows:
               Depreciation on plant assets     $450,000
               Amortization of leasehold improvements     255,000
               Provision for doubtful accounts on short-term receivables     90,000
               Provision for doubtful accounts on long-term receivables     75,000
               Interest paid on short-term borrowings     60,000
               Interest paid on long-term borrowings     45,000
          Based solely on the information given above, what should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2004?
     45.     (cont.)
          a.     $1,695,000.
          b.     $1,770,000.
          c.     $1,755,000.
          d.     $1,875,000.

Use the following information for questions 46 through 50.

Renfro Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Renfro Mining Co. for 2004 and 2003 are provided below.

BALANCE SHEETS
               12/31/04          12/31/03
Cash               $153,000          $ 72,000
Accounts receivable          135,000          81,000
Merchandise inventory          144,000          180,000
Property, plant and equipment     $228,000          $360,000
Less accumulated depreciation      (120,000)      108,000      (114,000)      246,000
               $540,000          $579,000

Accounts payable          $ 66,000            $ 36,000
Income taxes payable          132,000          147,000
Bonds payable          135,000          225,000
Common stock          81,000          81,000
Retained earnings           126,000           90,000
               $540,000          $579,000

INCOME STATEMENT
For the Year Ended December 31, 2004
Sales          $3,150,000
Cost of sales           2,682,000
Gross profit          468,000
Selling expenses     $225,000
Administrative expenses      72,000      297,000
Income from operations          171,000
Interest expense           27,000
Income before taxes          144,000
Income taxes           36,000
Net income          $ 108,000
The following additional data were provided:
     1.     Dividends for the year 2004 were $72,000.
     2.     During the year, equipment was sold for $90,000. This equipment cost $132,000 originally and had a book value of $108,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
     3.     All depreciation expense is in the selling expense category.

The following question(s) relate(s) to a statement of cash flows (direct method) for the year ended December 31, 2004, for Renfro Mining Company.


     46.     The net cash provided by operating activities is
          a.     $153,000.
          b.     $108,000.
          c.     $90,000.
          d.     $75,000.

     47.     The net cash provided (used) by investing activities is
          a.     $(132,000).
          b.     $18,000.
          c.     $90,000.
          d.     $(108,000).

     48.     Under the direct method, the cash received from customers is
          a.     $3,204,000.
          b.     $3,096,000.
          c.     $3,150,000.
          d.     $3,165,000.

     49.     Under the direct method, the total taxes paid is
          a.     $36,000.
          b.     $15,000.
          c.     $21,000.
          d.     $51,000.

     50.     The net cash provided (used) by financing activities is
          a.     $(90,000).
          b.     $18,000.
          c.     $(162,000).
          d.     $72,000.

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$3.80

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494