CASH FLOW 1. Downton Smith Ltd. purchased a piece of machinery on Jan 1st 2013 for 400,000. The company estimated a useful life of 10 years and a residual value of zero for this asset. On December 31st 2015, the company decided to sell the machinery for 350,000. What is the accumulated depreciation of this piece of machinery on December 31, 2015 right before selling it? a. 80,000 b. 120,000 c. 280,000 d. 320,000 2. What is the gain or loss on the sale of this machinery at the end of 2015? a. gain of 50,000 b. loss of 50,000 c. gain of 70,000 d. loss of 70,000 3. The managers of Moreton, Inc. prepared the following summaries of their company's assets and liabilities (amounts are in millions): 31/12/x2 CURRENT ASSETS cash140 a/r50 inventories118 NON CURRENT ASSETS equipment,net260 TOTAL ASSETS568 LIABILITIES accounts payable101 OWNER'S EQUITY share capital250 retained profits217 TOTAL LIABILITIES AND EQUITY 568 31/12/x1 CURRENT ASSETS cash20 a/r70 inventories93 NON CURRENT ASSETS equipment,net300 TOTAL ASSETS483 LIABILITIES accounts payable80 OWNER'S EQUITY share capital250 retained profits153 TOTAL LIABILITIES AND EQUITY 483 An analysis of the company's cash account for x2 shows three main transactions (amounts also in millions): (1) amount received from customers: 500; (2) amount paid to suppliers for merchandise: 330; (3) amount of dividends declared and paid: 50. All sales and purchases are on credit. (Hint: Use T-accounts) Compute sales revenues in x2: a. 20 b. 450 c. 480 d. 520 4. Compute the purchases of inventoriesin x2: a. 21 b. 309 c. 310 d. 351 5. Compute cost of goods sold in x2 a. 129 b. 301 c. 326 d. 376 6. Compute the profit or loss for Moreton Inc. in x2. a. 114 b. 66 c. 34 d. 84 7. For the remaining questions, please consider the following cash transactions that happened in the company Becker GmbH in 2015 (amounts in 000): Collections from customers: 500 Purchase of equipment: 40 Payment of dividends: 30 Payment of taxes: 20 Proceeds from sale of equipment: 20 Payment to suppliers: 300 Payment of salaries and administration expenses: 75 Payment of prepaid rent: 5 Acquisition of a long term loan: 90 Compute the cash flow from operations (CFO)? a. 80 b. 100 c. 105 d. 120 8. Compute the cash flow from investing activities (CFI). a. -60 b. -20 c. 20 d. 30 9. Compute the cash flow from financing activities (CFF). a. -120 b. -60 c. 40 d. 60 10. How much was the total change in cash in 2015? a. 140 b. 0 c. 80 d. 180 11. Vertikal SA imports and distributes climbing gear. Its profit and loss account for the year x5 has the following items (amounts in 000): Debits: interest expense of 10, salaries expenses of 80, depreciation expense of 20, cost of goods sold of 150, utilities expenses of 30, rent expense of 15, and tax expense of 20. Credits: sales revenues of 350, and gain on sale of office equipment of 5. The net income is 30. Compute the gross margin for x5. a. 100 b. 120 c. 205 d. 200 12. Compute the operating profit for x5. a. 80 b. 55 c. 60 d. 75 13. Compute the profit before taxes for x5. a. 60 b. 50 c. 75 d. 55