Question
1- Edgar Inc. reported net income for calendar 2018 of $3,500,000. Additional information follows: Impairment of goodwill................................................ $ 30,000 Depreciation on plant assets....................................... 1,100,000 Long-term
1-
Edgar Inc. reported net income for calendar 2018 of $3,500,000. Additional information follows:
Impairment of goodwill................................................ $ 30,000 Depreciation on plant assets....................................... 1,100,000 Long-term debt:
Bond premium amortized ............................................ 45,000
Interest expense ......................................................... 600,000
Bad debts expense ..................................................... 75,000
Based on the above information, the cash provided by operating activities (indirect method) for calendar 2018 is a) $4,750,000. b) $4,730,000.
c) $4,715,000.
d) $4,660,000.
2- Edmund Corp. reported net income for calendar 2018 of $300,000. Additional information follows:
Depreciation on property, plant and equipment ..........$150,000
Bad debts expense..................................................... 55,000
Purchase of equipment............................................... 25,000
Interest paid on long-term bonds ................................15,000
Loss on sale of equipment..........................................85,000
Based on the above information, the cash provided by operating activities (indirect method) for calendar 2018 is a) $565,000. b) $590,000.
c) $605,000.
d) $630,000.
3-
During calendar 2018, Marcellus Inc. sold equipment for $168,000. The equipment had cost $252,000 and had a book value of $144,000 at the time of sale. Accumulated Depreciation Equipment was $688,000 at Dec 31, 2017 and $736,000 at Dec 31, 2018. Therefore, Depreciation Expense (Equipment) for 2018 was
a) $60,000.
b) $96,000.
c) $156,000.
d) $192,000.
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