3)

Which of the following transactions would be shown in thenon-cash investing and financing activities section of the statement of cashflows?

A.purchased land for$30,000 cash

B.settled along-term note payable by issuing common stock

C.issued20,000 shares of stock at$4 per share

D.sold equipment with book value of$6,500 in exchange for$6,500 cash

4) Gilmore Company uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ended December31, 2018:

Gilmore Company

Comparative Balance Sheet

December31, 2018 and 2017

2018

2017

Increase

(Decrease)

Cash

$35,900

$19,700

$16,200

Accounts Receivable

26,900

30,100

(3,200)

Merchandise Inventory

55,200

28,200

27,000

PP&E, net

126,000

92,000

34,000

Total Assets

$244,000

$170,000

$74,000

Accounts Payable

9,800

13,800

$(4,000)

Accrued Liabilities

5,500

1,500

4,000

Longminus

term Notes Payable

70,700

79,700

$(9,000)

Total Liabilities

$86,000

$95,000

$(9,000)

Common Stock

$55,000

$3,000

$52,000

Retained Earnings

115,000

78,000

37,000

Treasury Stock

(12,000)

(6,000)

(6,000)

TotalStockholders' Equity

$158,000

$75,000

$83,000

Total Liabilities andStockholders' Equity

$244,000

$170,000

$74,000

Gilmore Company

Income Statement

December31, 2018

Sales Revenue

$289,400

Interest Revenue

2,900

Gain on Sale of Plant Assets

6,000

Total Revenues and Gains

$298,300

Cost of Goods Sold

146,100

Salaries and Wages Expense

49,700

Depreciation Expenselong dash

Plant Assets

16,000

Other Operating Expense

23,200

Interest Expense

3,500

Income Tax Expense

7,800

Total Expenses

246,300

Net Income

$52,000

Use the directmethod, to compute the net cash provided by operating activities.(Accrued Liabilities relate to other operatingexpense.)

A.($38,200)

B.$54,200

C.$38,200

D.($54,200)

6) Wesley, Inc. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balancesheet:

Wesley, Inc.

Comparative Balance Sheet

December31, 2019 and 2018

2019

2018

Increase/(Decrease)

Cash

$42,000

$25,000

$17,000

Accounts Receivable

32,000

55,000

(23,000)

Merchandise Inventory

180,000

123,000

57,000

Total Assets

$254,000

$203,000

$51,000

The change in Merchandise Inventory is shown as a negative cash flow in the adjustments to net income.

True or False

9) Wisconsin Farm Equipment Company sold equipment for cash. The income statement shows a loss on the sale of $7,000. The net book value of the asset was$28,900. Which of the following statements describes the cash effect of thetransaction?

A.negative cash flow of$21,900 for financing activities

B.positive cash flow of$35,900 from financing activities

C.negative cash flow of$21,900 for operating activities

D.positive cash flow of$21,900 from investing activities

12) The cash paid for the purchase of equipment will typically be shown in the investing activities section of the statement of cash flows.

True

False

14) Lightning Electric Company uses the direct method to prepare its statement of cash flows. Lightning has reported operating expenses of$63,000 on its income statement for the year 2019. If the balance in accrued liabilities has increased by$6,000 during theyear, then$6,000 needs to be added to$63,000 to calculate payments to suppliers for operating expenses. Accrued liabilities relate to operating expenses.

True

False

15) Specialty Auto Parts Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for2018:

Net cash provided by operatingactivities: $109,000

Net cash used for investingactivities: ($114,500)

Net cash provided by financingactivities: $16,000

If the cash balance at the beginning of the year was$13,200, what is the ending cashbalance?

A.$5,500

B.$23,700

C.$13,200

D.$10,500

16) Which of the following sections from the statement of cash flows includes the cash paid for the purchase of TreasuryStock?

A.the operating activities section

B.the investing activities section

C.the financing activities section

D.thenon-cash investing and financing section

17) The statement of cash flows is dated the same as the balance sheet.

True

False

18) Wellington, Inc. uses the direct method to prepare its statement of cash flows. Refer to the following financial statement information for the year ended December31, 2019:

Wellington, Inc.

Comparative Balance Sheet

December31, 2019 and 2018

2019

2018

Increase

(Decrease)

Cash

$ 33 comma 900

$33,900

$ 19 comma 400

$19,400

$ 14 comma 500

$14,500

Accounts Receivable

28 comma 000

28,000

29 comma 500

29,500

(1 comma 500

1,500)

Merchandise Inventory

56 comma 100

56,100

29 comma 100

29,100

27,000

PP&E, net

126,000

92,000

34,000

Total Assets

$244,000

$170,000

$74,000

Accounts Payable

8 comma 500

8,500

12 comma 500

12,500

$(4,000)

Accrued Liabilities

6 comma 200

6,200

2 comma 200

2,200

4,000

Longminus

term Notes Payable

71 comma 300

71,300

80 comma 300

80,300

(9 comma 000

9,000)

Total Liabilities

$86,000

$95,000

$(9,000)

Common Stock

$55,000

$3,000

$52,000

Retained Earnings

115,000

78,000

37,000

Treasury Stock

(12,000)

(6,000)

(6,000)

TotalStockholders' Equity

$158,000

$75,000

$83,000

Total Liabilities andStockholders' Equity

$244,000

$170,000

$74,000

Wellington, Inc.

Income Statement

December31, 2019

Sales Revenue

$ 291 comma 300

$291,300

Interest Revenue

1 comma 000

1,000

Gain on Sale of Plant Assets

6,000

Total Revenues and Gains

$298,300

Cost of Goods Sold

147 comma 600

147,600

Salaries and Wages Expense

47 comma 800

47,800

Depreciation Expenselong dash

Plant Assets

16,000

Other Operating Expense

23 comma 600

23,600

Interest Expense

3,500

Income Tax Expense

7,800

Total Expenses

246,300

Net Income

$52,000

Use the direct method to compute the total cash receipts from operating activities.

Use the direct method to compute the total cash receipts from operating activities.

A.$296,800

B.$293,800

C.$289,800

D.$ 261,800

19)

To complete the statement of cashflows, the net change in cash and its effects on the beginning cash balance must be shown.

True

False