29)

The following account balances are for Curran Company:

	Year 1					Year 2
Accounts receivable		$	84,000				$	60,000
Prepaid rent			8,000					4,000
Long-term marketable securities			80,000					70,000
Dividends payable			6,000					2,000
Salaries payable			8,000				$	2,000
Notes payable			44,000					34,000

Additional data for Year 2:

(1) Sales on account for the period totaled $100,000.

(2) Salary expense was $14,000.

(3) Rent expense was $12,000.

Based on this information, what was the net cash inflow from operating activities for year 2?

Multiple Choice

$92,000.

$84,000.

$88,000.

$74,000.

20)

Which of the following statements regarding the information disclosed in financial statements is incorrect?

Multiple Choice

The costs of providing all possible information about a firm would be prohibitively high for the business.

Financial statements should be detailed enough to answer any financial-related question an investor might have.

Some information disclosed in financial statements may be irrelevant to some users.

When too much information is presented users may suffer from information overload.

24)

Arch Associates reports the following comparative balance sheets and income statement information.

Arch Associates
Comparative Balance Sheets
	Year 1					Year 2
Cash		$	12,000				$	22,000
Accounts receivable			4,000					8,000
Prepaid insurance			10,000					8,000
Inventory			6,000					2,000
Property, plant and equipment			12,000					10,000
Total assets		$	44,000				$	50,000
Accounts payable		$	8,000				$	12,000
Salaries payable			10,000					4,000
Long term notes payable			8,000					6,000
stockholders' equity			18,000					28,000
Total liabilities and equity		$	44,000				$	50,000

Income Statement
Year 2 Ended
Revenue	$	70,000
Cost of goods sold		40,000
Gross margin		30,000
Operating expense		20,000
Net income	$	10,000

The amount of cash collected from customers during Year 2 was:

Multiple Choice

$70,000.

$66,000.

$62,000.

$74,000.