Question 9

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?

	1.	$352,000
	2.	$296,000
	3.	$198,000
	4.	$324,000

QUESTION 10

Which of the following would not be found in a Schedule of Noncash Investing and Financing Activities, reported at the end of a Statement of Cash Flows?

	1.	bonds payable exchanged for capital stock
	2.	capital stock issued to acquire fixed assets
	3.	stock dividends declared
	4.	purchase of treasury stock

QUESTION 11

Which of the following below increases cash?

	1.	the declaration of a cash dividend
	2.	acquisition of treasury stock
	3.	borrowing money by issuing a six-month note
	4.	depreciation expense