Exam 16: Basic Accounting Concepts, Techniques, and Conventions

Given below is a list of events: 1. payment of employee wages 2) cash collections from customers 3) sale of capital stock 4) sale of land, at cost 5) payment of a cash dividend 6) borrow cash from creditors 7) purchase of equipment 8) cash sale of inventory 9) purchase inventory on account Which of the above events are outflows in the financing section of the statement of cash flows?

Allocating the original cost of intangible assets

The section in the statement of cash flows that lists the cash flow effects of transactions that affect the income statement

The method for computing cash flows from operating activities that subtracts operating cash disbursements from cash collections to arrive at cash flows from operations

Referring to Tables 16- 1 and 16- 2, the cash paid for patents by Silver Company in 20X6 was:

Hidalgo Company has the following selected balance sheet and income statement information: $\text {For the Y ear}$ $\text {Ended}$ $\text {December 31}$ , $\quad$ $20 \times 5$ $\text {Income statement accounts:}$ Cost of goods sold \ 310,000 Income tax expense 27,000 Sales 465,000 Wage expens e 83,000 At December 31 Selected balance sheet accounts: Accounts p ay able \ 27,000 \ 23,000 Accounts receivable 12,000 10,000 C ash 15,000 11,000 Income taxes payable 15,000 6,000 Inventory 21,000 16,000 W ages p ayable 7,000 4,000 Determine the following items for Hidalgo Company for the year ended December 31, 20X5: a. cash received from customers b. cash paid to suppliers c. cash paid for wages d. cash paid for income taxes

At the beginning of the current year Duke Company had the following balances in their stockholders' equity accounts as of December 31, 20X5: Paid- in capital $43,000 Retained earnings 27,000 During the year ended December 31, 20X6, Duke Company generated $35,400 in net income, and declared and paid $12,000 in dividends. The ending balance in the Retained Earnings account at December 31, 20X6 is:

Old equipment having a book value of $12,000 was sold for $10,000 cash. New equipment was purchased for $25,000 cash. Additional equipment was acquired in exchange for a $17,000 long- term note payable. The cash flow from investing activities was:

Selected items from the financial statements from Nellie Company are listed below: Retained Earnings \ 100,000 Net Income \ 50,000 Dividends \ 75,000 Nellie Company has 5,000 shares of common stock outstanding. Nellie's earnings per share are:

An inventory method in which the current market prices of inventory is compared with its cost and the lower of the two is selected as the inventory amount for financial statement reporting

Wild Bill Company recently issued 10,000 shares of $1 per value common stock for $35,500. This transaction will affect Wild Bill Company by:

The "bottom line." The residual amount after deducting from revenues all expenses, including income taxes

The indirect and direct methods show the same amount of cash provided by (or used for) operating activities.

The wages expense of Alias Corporation was $45,000. Beginning wages payable was $5,000. Ending wages payable was $3,000. Cash paid to employees was:

An organization's debts that are due within the coming year or within the normal operating cycle if longer than a year

The statement of cash flows is used for all of the following except:

Dreamboat Company had the following information for the year ended December 31, 20X6, and at December 31, 20X5: Fixed ass ets \ 186,000 \ 156,000 Accumulated depreciation (62,000) (54,000) Depreciation expense for 20X6 was $18,000. Equipment which originally cost $20,000 with accumulated depreciation of $10,000 was sold at a $3,000 loss. Required: Determine how these events would appear on Dreamboat Company's statement of cash flows for the year ended December 31, 20X6, assuming that Dreamboat Company uses the direct method.

If a company has net income for the current year, then its year- end cash balance must be greater than its beginning of the year cash balance.

Which of the following would normally be considered a current liability? 1. accounts payable 2) debentures payable 3) unearned revenue 4) accrued liabilities

Willoughby Company purchased inventory on account for $735,000. Throughout the year inventory valued at $610,000 was sold for $762,500. Beginning and ending accounts payable balances were $90,000 and $60,000, respectively. Willoughby Company paid _ to its suppliers.