Deck 2: Statement of Cash Flows

Question 1

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

Answer 1

B

Question 2

Last year Cumberland Corporation reported a cost of goods sold of $120,000.Inventories increased by $35,000 during the year,and accounts payable increased by $20,000.The company uses the direct method to determine the net cash provided by operating activities on the statement of cash flows.The cost of goods sold adjusted to a cash basis would be:

A)$135,000
B)$100,000
C)$155,000
D)$105,000

Answer 2

A

Question 3

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:

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

Answer 3

$45,000

Question 4

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

Question 5

Last year Lawn Corporation reported sales of $115,000 on its income statement.During the year,accounts receivable decreased by $10,000 and accounts payable increased by $15,000.The company uses the direct method to determine the net cash provided by operating activities on the statement of cash flows.The sales revenue adjusted to a cash basis for the year would be:

A)$125,000
B)$90,000
C)$140,000
D)$100,000

Question 6

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.

Question 7

Brew Corporation's most recent comparative statement of financial position and income statement appear below: Cash dividends were $37.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)$185
B)$51
C)$83
D)$191

Question 8

Wister Corporation had net 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 net sales adjusted to a cash basis (i.e. ,cash received from sales)?
$$\begin{array} { l r r } & \text { Ending } & \text { Beginning } \\\text { Cash................... } & \$ 105,000 & \$ 132,000 \\\text { Accounts receivable...... } & \$ 168,000 & \$ 142,000 \\\text { Inventory................. } & \$ 472,000 & \$ 536,000 \\\text { Accounts payable........ } & \$ 74,000 & \$ 91,000 \\\text { Retained earnings....... } & \$ 364,000 & \$ 292,000\end{array}$$

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

Question 9

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

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

Question 10

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.

Question 11

During the year the balance in the Accounts Receivable 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 sales revenue reported on the income statement.
B)add the $6,000 to the sales revenue 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.

Question 12

If accounts receivable increase during a period,then the amount of cash collected from customers will be less than the amount of sales reported on the income statement for the period.

Question 13

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

Question 14

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.

Question 15

Cridberg Corporation's selling and administrative expenses for last year totaled $260,000.During the year the company's prepaid expense account balance increased by $18,000 and accrued liabilities decreased by $12,000.Depreciation for the year was $25,000.Based on this information,selling and administrative expenses adjusted to a cash basis under the direct method on the statement of cash flows would be:

A)$255,000
B)$315,000
C)$205,000
D)$265,000

Question 16

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

Question 17

Under the direct method of determining the net cash provided by 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.

Question 18

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:
$\begin{array}{lcc}&\text { Ending Balance}&\text { Beginning Balance }\\\text { Accounts receivable...... } & \$ 30,000 & ? \\\text { Prepaid expenses........ } & \$ 14,000 & \$ 11,000 \\\text { Inventory.............. } & \$ 18,000 & \$ 20,000\end{array}$

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

Question 19

LFM Corporation reported cost of goods sold on its income statement of $15,000.The following account balances appeared on the company's comparative statement of financial position for the same year: The company uses the direct method to determine the net cash provided by operating activities.The cost of goods sold,adjusted to a cash basis,on the company's statement of cash flows for the year would be:
$\begin{array}{lcc}&\text { Ending Balance }&\text {Beginning Balance }\\\text { Inventory.................... } & \$ 33,000 & \$ 30,000 \\\text { Accounts Payable ....... } & \$ 23,000 & \$ 21,000\end{array}$

A)$14,000
B)$16,000
C)$10,000
D)$15,000

Question 20

Under the direct method of determining the net cash provided by operating activities on the statement of cash flows,a decrease in prepaid expenses would be added to selling and administrative expenses to convert selling and administrative expenses to a cash basis.

Question 21

Shimko Corporation's most recent comparative statement of financial position and income statement appear below:
The company paid a cash dividend of $19 and it did not dispose of any property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows.

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

A)$23
B)$133
C)$157
D)$87

Question 22

The most recent statement of financial position and income statement of Oldaker Corporation appear below:
The company paid a cash dividend of $42 and it did not dispose of any property,plant,and equipment.The company did not retire any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows.

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

A)$(127)
B)$(138)
C)$138
D)$127

Question 23

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.
$\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^?000&\$^?000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}$ $\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^?000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array}$

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

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

Question 24

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.
$\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^?000&\$^?000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}$ $\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^?000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array}$

-The net cash provided (used)by financing activities would be:

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

Question 25

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.
$\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^?000&\$^?000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}$ $\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^?000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array}$

-The selling and administrative expense adjusted to a cash basis would be:

A)$120,000
B)$106,000
C)$110,000
D)$112,000

Question 26

Learning Objective: 1
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

Question 27

The most recent statement of financial position and income statement of Oldaker Corporation appear below:
The company paid a cash dividend of $42 and it did not dispose of any property,plant,and equipment.The company did not retire any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows.

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

A)$168
B)$8
C)$152
D)$229

Question 28

Learning Objective: 1
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)financing activities for the year was:

A)$(44)
B)$(71)
C)$2
D)$(29)

Question 29

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.
$\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^?000&\$^?000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}$ $\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^?000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array}$

-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

Question 30

The changes in Northrup Corporation's statement of financial position account balances for last year appear below:
The company's income statement for the year appears below:
The company declared and paid $28,000 in cash dividends during the year.It did not dispose of any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities.
$\begin{array}{c}\begin{array}{lll}\\\\ \text {Assets and Contra-asset Accounts}\\ \text {Property, plant and equipment...........}\\ \text {Acoumulated depreciation..................}\\ \text {Long-term investments.......................}\\ \text {Accounts recevable.............................}\\ \text {Inventory...........................................}\\ \text {Prepaid expenses................................}\\ \text {Cash and cash equivalents..................}\\\\ \text { Equity and Libbilities Accounts}\\ \text { Common stock....................................}\\ \text { Retained earnings...............................}\\ \text { Bonds payable....................................}\\ \text { Acoounts payable...............................}\\ \text { Accrued liabilties................................}\\ \text { Income taxes payable..........................}\end{array}\begin{array}{r}\text {Increase}\\\text {(Decreases)}\\\$^? 000 \\25 \\68 \\40 \\\color{red}{(4) }\\\color{red}{(2)} \\2 \\4\\\\\\10\\63\\\color{red}{(70)}\\\color{red}{(6)}\\8\\\color{red}{(8)}\end{array}\end{array}$
$\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^? 000 \\ \text { Revenue.............................................. } &980 \\ \text { Cost of goods sold............................... } &\underline{540}\\ \text {Gross margin....................................... } &440\\ \text {Selling and administrative expense...... } &\underline{310}\\ \text { Net operating income.......................... } &130\\ \text { Income taxes....................................... } &\underline{39}\\ \text { Net income..........................................}&\underline{91}\end{array}\end{array}$


-On the statement of cash flows,the cost of goods sold adjusted to a cash basis would be:

A)$546,000
B)$536,000
C)$544,000
D)$540,000

Question 31

Last year Marton Corporation reported a cost of goods sold of $720,000 on its income statement.The following additional data were taken from the company's comparative statement of financial position for the year: The company uses the direct method to determine the net cash provided by operating activities on the statement of cash flows.The cost of goods sold adjusted to a cash basis would be:
$$\begin{array} { l r r } & { \text { Ending } } & \text { Beginning } \\\text { Inventory............. } & \$ 105,000 & \$ 85,000 \\\text { Accounts payable ..... } & \$ 65,000 & \$ 92,000\end{array}$$

A)$740,000
B)$767,000
C)$747,000
D)$673,000

Question 32

The changes in Northrup Corporation's statement of financial position account balances for last year appear below:
The company's income statement for the year appears below:
The company declared and paid $28,000 in cash dividends during the year.It did not dispose of any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities.
$\begin{array}{c}\begin{array}{lll}\\\\ \text {Assets and Contra-asset Accounts}\\ \text {Property, plant and equipment...........}\\ \text {Acoumulated depreciation..................}\\ \text {Long-term investments.......................}\\ \text {Accounts recevable.............................}\\ \text {Inventory...........................................}\\ \text {Prepaid expenses................................}\\ \text {Cash and cash equivalents..................}\\\\ \text { Equity and Libbilities Accounts}\\ \text { Common stock....................................}\\ \text { Retained earnings...............................}\\ \text { Bonds payable....................................}\\ \text { Acoounts payable...............................}\\ \text { Accrued liabilties................................}\\ \text { Income taxes payable..........................}\end{array}\begin{array}{r}\text {Increase}\\\text {(Decreases)}\\\$^? 000 \\25 \\68 \\40 \\\color{red}{(4) }\\\color{red}{(2)} \\2 \\4\\\\\\10\\63\\\color{red}{(70)}\\\color{red}{(6)}\\8\\\color{red}{(8)}\end{array}\end{array}$
$\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^? 000 \\ \text { Revenue.............................................. } &980 \\ \text { Cost of goods sold............................... } &\underline{540}\\ \text {Gross margin....................................... } &440\\ \text {Selling and administrative expense...... } &\underline{310}\\ \text { Net operating income.......................... } &130\\ \text { Income taxes....................................... } &\underline{39}\\ \text { Net income..........................................}&\underline{91}\end{array}\end{array}$


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

A)$47,000
B)$39,000
C)$31,000
D)$49,000

Question 33

Shimko Corporation's most recent comparative statement of financial position and income statement appear below:
The company paid a cash dividend of $19 and it did not dispose of any property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows.

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

A)$(19)
B)$(53)
C)$1
D)$(71)

Question 34

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

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

Question 35

Learning Objective: 1
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)operating activities for the year was:

A)$187
B)$231
C)$257
D)$201

Question 36

Shimko Corporation's most recent comparative statement of financial position and income statement appear below:
The company paid a cash dividend of $19 and it did not dispose of any property,plant,and equipment.The company did not issue any bonds payable or repurchase any of its own common stock.The following questions pertain to the company's statement of cash flows.

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

A)$57
B)$(57)
C)$33
D)$(33)

Question 37

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.
$\begin{array}{c}\text { Statement of Financial Position }\\\\\begin{array}{lc}&\text {Increase}&\text { Decrease}\\&\$^?000&\$^?000\\ \text { Assets }&&\\\text { Property, plant and equipment } & 10 \\\text { Acoumulated depreciation } & 8 \\\text { Long-term investment } & &15 \\\text { Acoounts receivable } &2 \\\text { Inventory } & &3 \\\text { Prepaid expenses } & 4\\\text { Cash and cash equivalents }&3\\\\ \text {Equity and Liabilities } & \\ \text { Common stock } &5\\ \text { Retained earnings } &4\\ \text {Bonds payable } &&13\\ \text {Accounts payable } &&9\\ \text {Accrued liabilities } &6\\\end{array}\end{array}$ $\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^?000\\\text { Revenue } & 300 \\\text { Cost of goods sold } &\underline{ 180 }\\\text { Gross margin } & 120 \\\text { Selling and administrative expens } & \underline{116 }\\\text { Net inoome }& \underline{4 }\\\end{array} \end{array}$

-Using the direct method,sales adjusted to a cash basis would be:

A)$300,000
B)$302,000
C)$298,000
D)$305,000

Question 38

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

Question 39

The changes in Northrup Corporation's statement of financial position account balances for last year appear below:
The company's income statement for the year appears below:
The company declared and paid $28,000 in cash dividends during the year.It did not dispose of any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities.
$\begin{array}{c}\begin{array}{lll}\\\\ \text {Assets and Contra-asset Accounts}\\ \text {Property, plant and equipment...........}\\ \text {Acoumulated depreciation..................}\\ \text {Long-term investments.......................}\\ \text {Accounts recevable.............................}\\ \text {Inventory...........................................}\\ \text {Prepaid expenses................................}\\ \text {Cash and cash equivalents..................}\\\\ \text { Equity and Libbilities Accounts}\\ \text { Common stock....................................}\\ \text { Retained earnings...............................}\\ \text { Bonds payable....................................}\\ \text { Acoounts payable...............................}\\ \text { Accrued liabilties................................}\\ \text { Income taxes payable..........................}\end{array}\begin{array}{r}\text {Increase}\\\text {(Decreases)}\\\$^? 000 \\25 \\68 \\40 \\\color{red}{(4) }\\\color{red}{(2)} \\2 \\4\\\\\\10\\63\\\color{red}{(70)}\\\color{red}{(6)}\\8\\\color{red}{(8)}\end{array}\end{array}$
$\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^? 000 \\ \text { Revenue.............................................. } &980 \\ \text { Cost of goods sold............................... } &\underline{540}\\ \text {Gross margin....................................... } &440\\ \text {Selling and administrative expense...... } &\underline{310}\\ \text { Net operating income.......................... } &130\\ \text { Income taxes....................................... } &\underline{39}\\ \text { Net income..........................................}&\underline{91}\end{array}\end{array}$


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

A)$304,000
B)$384,000
C)$310,000
D)$236,000

Question 40

The changes in Northrup Corporation's statement of financial position account balances for last year appear below:
The company's income statement for the year appears below:
The company declared and paid $28,000 in cash dividends during the year.It did not dispose of any property,plant,and equipment during the year.The company uses the direct method to determine the net cash provided by operating activities.
$\begin{array}{c}\begin{array}{lll}\\\\ \text {Assets and Contra-asset Accounts}\\ \text {Property, plant and equipment...........}\\ \text {Acoumulated depreciation..................}\\ \text {Long-term investments.......................}\\ \text {Accounts recevable.............................}\\ \text {Inventory...........................................}\\ \text {Prepaid expenses................................}\\ \text {Cash and cash equivalents..................}\\\\ \text { Equity and Libbilities Accounts}\\ \text { Common stock....................................}\\ \text { Retained earnings...............................}\\ \text { Bonds payable....................................}\\ \text { Acoounts payable...............................}\\ \text { Accrued liabilties................................}\\ \text { Income taxes payable..........................}\end{array}\begin{array}{r}\text {Increase}\\\text {(Decreases)}\\\$^? 000 \\25 \\68 \\40 \\\color{red}{(4) }\\\color{red}{(2)} \\2 \\4\\\\\\10\\63\\\color{red}{(70)}\\\color{red}{(6)}\\8\\\color{red}{(8)}\end{array}\end{array}$
$\begin{array}{c}\text { Income Statement }\\\\\begin{array}{lr}&\$^? 000 \\ \text { Revenue.............................................. } &980 \\ \text { Cost of goods sold............................... } &\underline{540}\\ \text {Gross margin....................................... } &440\\ \text {Selling and administrative expense...... } &\underline{310}\\ \text { Net operating income.......................... } &130\\ \text { Income taxes....................................... } &\underline{39}\\ \text { Net income..........................................}&\underline{91}\end{array}\end{array}$


-On the statement of cash flows,the sales adjusted to a cash basis would be:

A)$976,000
B)$982,000
C)$984,000
D)$980,000

Question 41

Maloney Corporation's statement of financial position 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.

Question 42

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 selling and administrative expense adjusted to a cash basis would be:

A)$201,000
B)$166,000
C)$254,000
D)$210,000

Question 43

Digby Corporation's statement of financial position 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.

Question 44

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

Question 45

Carson Corporation's comparative statement of financial position 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.

Question 46

The changes in each statement of financial position account for Carver Corporation during the year just completed are as follows:
Carver Corporation's income statement for the year just ended shows the following:
The company did not dispose of any property,plant,and equipment,buy any long-term investments,issue any bonds payable,or repurchase any of its own common stock during the year.Carver Corporation uses the direct method to construct its statement of cash flows.
Required:
a.Determine the sales adjusted to the cash basis.
b.Determine the cost of goods sold adjusted to the cash basis.
c.Determine the selling and administrative expenses adjusted to a cash basis.
d.Determine the net cash provided (used)by operating activities.
e.Determine the net cash provided (used)by investing activities.
f.Determine the net cash provided (used)by financing activities.

Question 47

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 cost of goods sold adjusted to a cash basis would be:

A)$360,000
B)$350,000
C)$370,000
D)$381,000

Question 48

Carr Corporation's comparative statement of financial position 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.

Question 49

Last year,Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000.During the year,the balance in accounts receivable increased $30,000,the balance in accounts payable decreased $25,000,and the balance in inventory increased $10,000.The company uses the direct method to determine the net cash provided by operating activities on its statement of cash flows.
Under the direct method,cost of goods sold adjusted to a cash basis would be:

A)$105,000
B)$125,000
C)$175,000
D)$155,000

Question 50

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.
$$\begin{array} { l r r } & \begin{array} { c } \text { Ending }\end{array} & \text { Beginning } \\\text { Cash................. } & \$ 42,000 & \$ 31,000 \\\text { Accounts receivable....... } & \$ 87,000 & \$ 72,000 \\\text { Inventory ................ } & \$ 96,000 & \$ 83,000 \\\text { Accounts payable ....... } & \$ 23,000 & \$ 29,000\end{array}$$

-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

Question 51

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.

Question 52

Harkey Corporation's statement of financial position and income statement appear below:
Cash dividends were $29.The company sold equipment for $15 that was originally purchased for $6 and that had accumulated depreciation of $2.
Required:
Using the direct method,determine the net cash provided by operating activities.

Question 53

Last year,Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000.During the year,the balance in accounts receivable increased $30,000,the balance in accounts payable decreased $25,000,and the balance in inventory increased $10,000.The company uses the direct method to determine the net cash provided by operating activities on its statement of cash flows.
Under the direct method,sales adjusted to a cash basis would be:

A)$295,000
B)$345,000
C)$405,000
D)$355,000

Question 54

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.

Question 55

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

Question 56

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.
$$\begin{array} { l r r } & \begin{array} { c } \text { Ending }\end{array} & \text { Beginning } \\\text { Cash................. } & \$ 42,000 & \$ 31,000 \\\text { Accounts receivable....... } & \$ 87,000 & \$ 72,000 \\\text { Inventory ................ } & \$ 96,000 & \$ 83,000 \\\text { Accounts payable ....... } & \$ 23,000 & \$ 29,000\end{array}$$

-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