1) For the year ending December 31, 2014, Martha Company reports net income of $23,000 and depreciation expense of $7,000. The income tax expense for the year ending December 31, 2014 is $20,000. The following data is available:

December 31, 2013 December 31, 2014

Cash $25,000 $16,000

Accounts Receivable $25,000 $45,000

Inventories $60,000 $100,000

Fixed Assets $330,000 $581,000

Accumulated Depreciation $110,000 $101,000

Accounts Payable $6,000 $74,000

Wages Payable $4,000 $25,000

What is the net cash provided (used) by operating activities for the year ended December 31, 2014? Assume the indirect method is used.

A) $(20,000)

B) $23,000

C) $59,000

D) $69,000

2) For the year ending December 31, 2014, Harkins Company reports net income of $35,000 and depreciation expense of $12,000. The income tax expense for the year ending December 31, 2014 is $20,000. The following data is available:

December 31, 2013 December 31, 2014

Cash $35,000 $16,000

Accounts Receivable $35,000 $45,000

Inventories $70,000 $100,000

Fixed Assets $440,000 $581,000

Accumulated Depreciation $120,000 $101,000

Accounts Payable $6,000 $74,000

Wages Payable $4,000 $25,000

What is the net cash provided by operating activities for the year ended December 31, 2014? Assume the indirect method is used.

A) $5,000

B) $26,000

C) $73,000

D) $96,000

1) On January 1, 2012, a parent company acquired all of the stock of a subsidiary. The following data is available:

Parent Company Subsidiary

Total assets $650 $400

Total liabilities $200 $190

Total stockholders' equity $450 $210

3)The acquisition by the parent company represents a 100 percent interest in the subsidiary. On January 1, 2012, the fair value of the subsidiary's assets and liabilities are equal to their book value. The parent company paid $250 for the 100 percent interest in the subsidiary. What amount of goodwill is implied in the purchase?

A) $0

B) $10

C) $40

D) $200

Answer: C

Diff: 3

LO: 17-3

AACSB: Analytic skills

Learning Outcome: None