9. MC.13-81

The net income reported on the income statement for the current year was $275,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:

End Beginning

Cash $50,000 $60,000

Accounts receivable 112,000 108,000

Inventories 105,000 93,000

Prepaid expenses 4,500 6,500

Accounts payable (merchandise creditors) 75,000 89,000

What is the amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

$324,000

$352,000

$198,000

$296,000

10. MC.13-83

On the statement of cash flows, the cash flows from investing activities section would include

payments for retirement of bonds payable

receipts from the issuance of capital stock

receipts from the sale of investments

payments for dividends

11. MC.13-84

A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as follows:

a. an increase of $9,000 from investing activities

b. an increase of $54,000 from investing activities

c. an increase of $63,000 from investing activities and a deduction from net income of $9,000

d. an increase of $54,000 from investing activities and an addition to net income of $9,000

12. MC.13-86

If a gain of $11,000 is realized in selling (for cash) office equipment having a book value of $55,000, the total amount reported in the cash flows from investing activities section of the statement of cash flows is

a. $11,000

b. $44,000

c. $66,000

d. $55,000