13) Vanilla Company purchased equipment that cost $3,000,000 on January 1, 2018. The entire cost was recorded as an expense. The equipment has a ten-year life and a $100,000 residual value. Vanilla uses the straight-line method to account for depreciation expense. The error was discovered on May 15, 2022.

What is the adjustment to retained earnings on May 15, 2022?

14) A stock dividend and a cash dividend are similar in that they both reduce total stockholders equity. However, a stock dividend does not affect the statement of cash flows whereas a cash dividend does affect the statement of cash flows. (True/False)

15) When preparing a statement of cash flows (indirect method), an increase in accounts receivable would result in a deduction from net income. (True/False)

16) When using the indirect method to prepare the operating section of a statement of cash flows, a gain on the sale of land and an increase in notes receivable would both be added back as an adjustment to net income. (True/False)

17) A statement of cash flows would not disclose the purchase of machinery in exchange for a note payable. (True/False)

18) Under the indirect method, rent expense incurred but unpaid will not affect the statement of cash flows. (True/False)

19) Rose Company sold a plant asset during 2021. The original cost of the plant asset was $500,000 and the accumulated depreciation at date of sale was $350,000. The proceeds from the sale of the plant asset were $70,000. The effect of the sale of this asset on the operating activities section is?

20) Canadian Corporation had net income for 2021 of $3,500,000. Additional information is as follows:

Depreciation of plant assets $600,000

Amortization of intangibles 200,000

Increase in accounts receivable 52,000

Decrease in accounts payable 240,000

Canadians net cash provided (used) by operating activities for 2021 was?