5.

Question 5

The balance in PP&E on Company A's Year 1 Balance Sheet is $20,000 and the balance in PP&E on its Year 2 Balance Sheet is $50,000. Depreciation expense recorded during Year 2 totaled 5,000. The company sold some equipment with a net book value of $2,000. How much PP&E did the company purchase during Year 2? Assuming no other transactions affected the account during the year.Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$57,000

$35,000

$37,000

$30,000

6.

Question 6

The beginning balance in Accounts Receivable on Company A's Year 2 Balance Sheet is $20,000. Sales on account during Year 2 are $200,000, cash collections from customers are $105,000, and an account for a customer owing $5,000 was written off because the company didnt think the customer would pay. What is the ending balance in AR on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$120,000

$115,000

$95,000

$110,000

7.

Question 7

The beginning balance in Retained Earnings is $20,000 and the ending balance is $60,000. Net Income is $70,000. Which of the following will be found in the Statement of Cash Flows prepared using the Indirect Method?

1 point

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Financing Activities section

Change in Retained Earnings of $40,000 in Financing Activities section

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Operating Activities section

Change in Retained Earnings of $40,000 in Operating Activities section

8.

Question 8

The beginning balance in Accounts Payable on Company A's Year 2 Balance Sheet is $180,000. The company purchased on account inventory of $200,000 during Year 2, and paid suppliers $40,000 in cash. What is the ending balance in Accounts Payable on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$380,000

$340,000

$160,000

$20,000

9.

Question 9

Company A purchased 1% of Company B's outstanding stock for $50,000 as a short-term investment. Which of the following related to the purchase will be found in Company A's Statement of Cash Flows?

1 point

Financing Activities: $50,000, cash inflow

Operating Activities: $50,000, cash outflow

Financing Activities: $50,000, cash outflow

Investing Activities: $50,000, cash outflow

10.

Question 10

The beginning balance in Inventory on Company A's Year 2 Balance Sheet is $20,000. The company purchased inventory for $200,000 during Year 2, sold inventory with book value of $105,000 for $145,000. What is the ending balance in Inventory on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$75,000

$95,000

$260,000

$115,000

11.

Question 11

The net increase in Prepaid Expenses (Prepaid) amounts to $30,000 and the net decrease in Accounts Payable (AP) is $20,000. What is the net effect of Prepaid and AP on the adjustments to Net Income if the indirect method is used in the Statement of Cash Flows?

1 point

Plus $10,000

Minus $50,000

Plus $50,000

Minus $10,000

12.

Question 12

The beginning balance in Loan Payable on Company A's Year 2 Balance Sheet is $180,000. The company took out new loans of $200,000 during Year 2, and repaid $40,000 of loans. What is the ending balance in Loan Payable on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$380,000

$340,000

$160,000

$20,000