Question 1 (1 point)Equipment that cost $350,000 and had a book value of $156,000 was sold for $180,000. Data from the comparative balance sheets are:

12/31/18

12/31/17

Equipment $2,160,000 $1,950,000

Accumulated Depreciation 660,000 570,000

Equipment purchased during 2018 was _________.

a

$560,000

b

$350,000

c

$210,000

d

$366,000

Question 2 (1 point)The following information on selected cash transactions for 2018 has been provided by Mancuso Company:

Proceeds from sale of land $190,000

Proceeds from long-term borrowings 400,000

Purchases of plant assets 144,000

Purchases of inventories 680,000

Proceeds from sale of Mancuso common stock 240,000

What is the cash provided (used) by investing activities for the year ended December 31, 2018, as a result of the above information?

a

$46,000

b

$256,000.

c

$190,000.

d

$830,000.

Question 3 (1 point)Xanthe Corporation had the following transactions occur in the current year:

1. Cash sale of merchandise inventory.

2. Sale of delivery truck at book value.

3. Sale of Xanthe's common stock for cash.

4. Issuance of a note payable to a bank for cash.

5. Sale of a security held as an available-for-sale investment.

6. Collection of loan receivable.

How many of the above items will appear as a cash inflow from investing activities on a statement of cash flows for the current year?

a

five items

b

four items

c

three items

d

two items

Question 4 (1 point)When preparing a statement of cash flows, a decrease in accounts receivable during a period would cause which one of the following adjustments in determining cash flow from operating activities?

a

direct method: increase; indirect method: decrease

b

direct method: decrease; indirect method: increase

c

direct method: increase; indirect method: increase

d

direct method: decrease; indirect method: decrease

Question 5 (1 point)Net cash flow from operating activities for 2018 for Spencer Corporation was $450,000. The following items are reported on the financial statements for 2018:

Cash dividends paid on common stock 20,000

Depreciation and amortization 12,000

Increase in accounts receivables 24,000

Based on the information above, Spencer's net income for 2018 was

_________.

a

$462,000

b

$446,000

c

$414,000

d

$406,000

Question 6 (1 point)Crabbe Company reported $80,000 of selling and administrative expenses on its income statement for the past year. The company had depreciation expense and an increase in prepaid expenses associated with the selling and administrative expenses for the year. Assuming use of the direct method, how would these items be handled in converting the accrual-based selling and administrative expenses to the cash basis?

a

deducted from depreciation; deducted from expenses

b

added to depreciation; added to expenses

c

deducted from depreciation; added to expenses

d

added to depreciation; deducted from expenses

Question 7 (1 point)When preparing a statement of cash flows, an increase in accounts payable during a period would require which of the following adjustments in determining cash flows from operating activities?

a

direct method: increase; indirect method: decrease

b

direct method: decrease; indirect method: increase

c

direct method: increase; indirect method: increase

d

direct method: decrease; indirect method: decrease

Question 8 (1 point)When preparing a statement of cash flows (indirect method), an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because __________.

a

cash was increased while cost of goods sold was decreased

b

cost of goods sold on an accrual basis is lower than on a cash basis

c

acquisition of inventory is an investment activity

d

inventory purchased during the period was less than inventory sold, resulting in a net cash increase

Question 9 (1 point)In determining net cash flow from operating activities, a decrease in accounts payable during a period __________.

a

means that income on an accrual basis is less than income on a cash basis

b

requires an addition adjustment to net income under the indirect method

c

requires an increase adjustment to cost of goods sold under the direct method

d

requires a decrease adjustment to cost of goods sold under the direct method

Question 10 (1 point)Jarvis, Inc., reported net income of $34,000 for the year ended December 31, 2018. Included in net income was a gain on early extinguishment of debt of $60,000 related to bonds payable with a book value of $1,200,000. Each of the following accounts increased during 2018:

Notes receivable $45,000

Deferred tax liability $10,000

Treasury stock $150,000

What is the amount of cash used by financing activities for Jarvis, Inc., for the year ended December 31, 2018?

a

$1,290,000

b

$1,300,000

c

$220,000

d

$255,000