How to get these MCQS

12) Lee Limited began operations on January 1, 2010. The following data relate to the company's first 2 years in business: Reported Amount Correct Amount Inventory December 31, 2010 25,000 20,000 December 31, 2011 35,000 30,000 Cost of goods sold For 2010 400,000 ?????? For 2011 450,000 ?????? What is the correct cost of goods sold amount for 2011? A) $400,000 B) $405,000 C) $450,000 D) $460,000 15) A corporation reported the following information in its income statement: Sales revenue (none on credit) Cost of goods sold (paid in cash) Gross margin on sales Depreciation expense Amortization expense Wage expense (paid in cash) Income before taxes Income taxes (20%) (paid in cash) Net Income $60,000 40,000 20,000 (2,000) (1,000) (2,500) 14,500 (2,900) $11,600 The corporation should report the following amount on its Statement of Cash Flow for net cash from operating activities: A) $11,600 B) $13,600 C) $14,600 D) $17,100 16) The following item is found on the income statement of a corporation: Gain from sale of equipment, $5,000. The equipment sold during the year originally cost $20,000, had accumulated depreciation of $16,000 and was sold for cash. The Statement of Cash Flow should show an inflow of cash from investing activities of: A) $1,000 B) $4,000 C) $5,000 D) $9,000 17) JP Corporation had net income of $1,000,000 for 2011. After issuing its financial statements, it realized that it had failed to include inventory from one of its small warehouses for several years. Specifically, it forgot to include $20,000 on December 31, 2010, and $30,000 on December 31, 2011. Which of the following is true regarding JPs 2011 net income? A) Net income was understated by $10,000. B) Net income was overstated by $10,000. C) Net income was understated by $30,000. D) Net income was overstated by $30,000