21. Which of the following would require an adjustment in the computation of cash flow from operations using the indirect method? I. Sale of machinery for 50,000 with a net book value of 35,000 II. Purchase of supplies for cash III. Remittance by customer in payment of goods purchased this accounting period IV. Acquisition of land with simultaneous issuance of long-term note a) I b) I and II c) I and III d) IV e) II

22. A firm has net sales of 6,000, cash expenses (including taxes) of 2,800, and depreciation of 1,000. If accounts receivable increased in the period by 800, cash flows from operations are equal to: a) 3,200 b) 2,400 c) 3,400 d) 4,200 e) 3,000

Hupta Corporation reports for the year ended December 31, 2005 sales of 9,430 and cost of goods sold of 6,500. Other information as of December 31 is as follows: 2004 2005 Accounts Receivable Inventory Accounts Payable 500 400 250 550 380 290 Based on the above information for Hupta Corporation, answer questions 23-25.

23. An increase in accounts payable would be considered: a) a use of cash b) a source of cash c) an adjusting entry d) a noncash charge to income e) none of the above

24. Cash paid to suppliers for year ended December 31, 2005 is: a) 6,480 b) 5,520 c) 6,440 d) 6,560 e) 6,200

25. Cash collected from customers for the year ended December 31, 2005 is: a) 9,430 b) 9,380 c) 8,930 d) 8,980 e) 9,000