QUESTION 1

1. Use the following information to answer question 1-3.

   Southwest Company

   Balance Sheet and Income Statement

   For the Years Ending December 31, 2015 and 2014

   December 31

   	2015	2014
   Current Assets:
   Cash	$ 9,000	$ ?
   Accounts Receivable	14,000	18,000
   Inventory	23,000	20,000
   Total Current Assets	46,000	45,000
   Fixed Assets	73,000	66,000
   Less: Accum. Depreciation	(28,000)	(26,000)
   TOTAL ASSETS	$ 91,000	$ 85,000
   Current Liabilities:
   Accounts Payable	$ 11,000	$ 6,000
   Wages Payable	3,000	4,000
   Income Tax Payable	5,000	4,500
   Total Current Liabilities	19,000	14,500
   Long Term Bonds Payable	20,000	23,000
   TOTAL LIABILITIES	39,000	37,500
   Owners Equity:
   Common Stock ($10 par)	30,000	27,500
   Retained Earnings	22,000	20,000
   TOTAL LIAB. & OWNERS EQUITY	$ 91,000	$ 85,000
   	INCOME STATEMENT
   Sales (all credit sales)	$ 95,000	$ 89,000
   Less: COGS	43,000	43,000
   Gross Margin	52,000	46,000
   Less: Operating Expenses	34,000	31,000
   Loss on Sale of Fixed Assets	1,000	0
   Net Income Before Taxes	17,000	15,000
   Less: Income Taxes	7,000	6,000
   NET INCOME	$ 10,000	$ 9,000

   ADDITIONAL INFORMATION: In 2015, sold a fixed asset with an original cost of $9,000 and accumulated depreciation of $7,000 and purchased a new fixed asset for cash.

   1. Cash Flow from Operations is:

   	A.	$25,000
   	B.	$24,500
   	C.	$25,500
   	D.	$27,000

1 points

QUESTION 2

1. Using the information from above...

   Cash Flow from Investing is:

   	A.	($16,000)
   	B.	($15,000)
   	C.	$1,000
   	D.	($17,000)

1 points

QUESTION 3

1. Using the information from above...

   Cash Flow from Financing is:

   	A.	($500)
   	B.	($11,000)
   	C.	($1,500)
   	D.	($8,500)

1 points

QUESTION 4

1. At Dec 31, ABC Company had currency and coins on hand of $500, deposits in checking accounts of $3,000, U.S. Treasury bills purchased on Dec. 1 and due on Jan. 31of $30,000, U.S. Treasury bills purchased on Nov 1 and due March 31 of $50,000, a money market account of $70,000, and 200 shares of Wal-Mart stock worth $2,000 purchased on Dec. 15 that management intends to sell on Jan. 15. What amount should ABC report as the balance in the Cash & Cash Equivalents account on Dec. 31?

   	A.	$105,500
   	B.	$103,500
   	C.	$153,500
   	D.	$155,500
   	E.	$33,500

1 points

QUESTION 5

1. Using the indirect method of presenting net cash flow from operating activities, depreciation expense is added to net income because

   	A.	it represents a cash inflow from the firms operating activities.
   	B.	it is a non-cash expense that was deducted in determining net income.
   	C.	it is similar to other operating expenses that are paid in cash during the period.
   	D.	it does not represent one of the firms operating expenses.
   	E.	None of the above.