Melmore Ltd had the following activity during 20X7: \[\begin{array} { | l | r | } \hline \text { Proceeds from sale of long-term investments } & \$ 156,000 \\ \hline \text { Gain on the sale of long-term investments } & \$ 16,000 \\ \hline \text { Loss on the disposal of equipment ( } \$ 0 \text { proceeds from disposal) } & \$ 17,000 \\ \hline \text { Proceeds from sale of preferred shares } & \$ 182,000 \\ \hline \text { Repayment of long-term debt } & \$ 30,000 \\ \hline \end{array}\] What is the cash flow from financing activities?

A) $135,000 B) $168,000 C) $169,000 D) $152,000 A) $135,000 B) $168,000 C) $169,000 D) $152,000

Mazoff Corp had the following activities during the year: \[\begin{array} { | l | r | } \hline \text { Proceeds from the sale of land } & \$ 300,000 \\ \hline \text { Gain on sale of land } & \$ 50,000 \\ \hline \text { Proceeds from the issue of common shares } & \$ 1,000,000 \\ \hline \text { Purchase of equipment } & \$ 450,000 \\ \hline \text { Repayment of mortgage outstanding on the sold land } & \$ 200,000 \\ \hline \text { Interest paid } & \$ 22,500 \\ \hline \text { Dividends paid } & \$ 10,000 \\ \hline \end{array}\] What was Mazoff's cash flow from investing activities for the year?

A) $350,000 outflow B) $150,000 outflow C) $100,000 outflow D) $850,000 inflow A) $350,000 outflow B) $150,000 outflow C) $100,000 outflow D) $850,000 inflow

The financial statements of Juliet Company show the following: \[\begin{array} { | l | r | r | } \hline & \text { Beginning balance } & \text { Ending balance } \\ \hline \text { Trade receivables } & \$ 28,000 & \$ 22,000 \\ \hline \text { Trade payables } & \$ 11,000 & \$ 15,000 \\ \hline \text { Purchases } & & \$ 74,000 \\ \hline \end{array}\] How much cash was paid out to suppliers?

A) $11,000. B) $15,000. C) $70,000. D) $74,000. A) $11,000. B) $15,000. C) $70,000. D) $74,000.

Match between columns Premises: Common shares are sold for cash. Bonds payable are issued for cash at a discount. Interest on a short-term note receivable is collected. Merchandise is sold to customers for cash. Cash is paid to purchase inventory. Equipment is purchased by signing a 3-year, 5% note payable. Cash dividends on common shares are declared and paid. One hundred XYZ common shares are purchased for cash. Land is sold for cash at book value. Recorded an increase in the market value of available-for-sale securities.

The Answer of an operating activity and an investing activity is...

A comparative balance sheet for Austin Corporation is presented below: $\begin{array}{|l|r|r|} \hline & \underline{20 X 7} & \underline{20 X 6} \\ \hline \text { Assets } & & \\ \hline \text { Cash } & \$ 39,000 & \$ 31,000 \\ \hline \text { Trade receivables (net) } & 73,000 & 60,000 \\ \hline \text { Prepaid insurance } & 19,000 & 17,000 \\ \hline \text { Land } & 18,000 & 40,000 \\ \hline \text { Equipment } & 70,000 & 60,000 \\ \hline \text { Accumulated depreciation } & (20,000 & (13,000 \\ \hline \text { Total assets } & \$ 199,000 & \$ 195,000 \\ \hline \text { Liabilities and Shareholders' Equity } & & \\ \hline \text { Trade payables } & \$ 11,000 & \$ 6,000 \\ \hline \text { Bonds payable } & 27,000 & 19,000 \\ \hline \text { Common shares } & 140,000 & 115,000 \\ \hline \text { Retained earnings } & 21,000 & \underline{55,000} \\ \hline \text { Total liabilities and shareholders' equity } & \$ 199,000 & \$ 195,000 \\ \hline \end{array}$ Additional information for 20X7: 1. Net loss for 20X7 is $25,000. 2. Cash dividends of $9,000 were declared and paid in 20X7 . 3. Land was sold for cash at a loss of $10,000. This was the only land transaction during the year . 4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash. 5. $12, 000 of bonds were retired during the year at their carrying amount. 6. Equipment was acquired for common shares. The fair value of the shares at the time of the exchange was $25,000. Prepare a cash ?ow statement for the year ended 20X7, using the indirect method.

AUSTIN CORPORATION Cash Flow Statement Y

Crocker Inc. had the following activity during 20X7: \[\begin{array} { | l | r | } \hline \text { Proceeds from sale of bonds payable } & \$ 200,000 \\ \hline \text { Loss from disposal of equipment (Net book value } \$ 60,000 ) & \$ 38,000 \\ \hline \text { Dividends paid to shareholders } & \$ 25,000 \\ \hline \text { Sale of shares } & \$ 125,000 \\ \hline \text { Gain on the sale of short term investments } & \$ 75,000 \\ \hline \end{array}\] What is the cash flow from investing activities?

A) $57,000 B) $75,000 C) $93,000 D) $22,000 A) $57,000 B) $75,000 C) $93,000 D) $22,000

Exam 5: Fraud, Internal Control, and Cash

Melmore Ltd had the following activity during 20X7: Proceeds from sale of long-term investments \ 156,000 Gain on the sale of long-term investments \ 16,000 Loss on the disposal of equipment ( \ 0 proceeds from disposal) \ 17,000 Proceeds from sale of preferred shares \ 182,000 Repayment of long-term debt \ 30,000 What is the cash flow from financing activities?

(Multiple Choice)

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Question 101

Mazoff Corp had the following activities during the year: Proceeds from the sale of land \ 300,000 Gain on sale of land \ 50,000 Proceeds from the issue of common shares \ 1,000,000 Purchase of equipment \ 450,000 Repayment of mortgage outstanding on the sold land \ 200,000 Interest paid \ 22,500 Dividends paid \ 10,000 What was Mazoff's cash flow from investing activities for the year?

(Multiple Choice)

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Question 102

Which one of the following items is not generally used in preparing a statement of cash ﬂows?

(Multiple Choice)

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Question 103

Under the indirect approach adjustments must be made to net income in the operations section for all of the following items, except

(Multiple Choice)

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Question 104

The purchase of a piece of equipment in exchange for common shares must be reported on the statement of cash ﬂows.

(True/False)

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Question 105

McIntire Company reported net earnings of $40,000 which included depreciation expense and depletion expense of $21,000 and $18,000, respectively. The following changes also occurred during 20X3 Inventory \ 10,000 decrease Trade payables 5,000 increase Notes payable (long-term) 15,000 decrease Income tax payable 7,000 increase Trade receivables 10,000 increase The amount of "cash flows from operating activities" was $______________

(Short Answer)

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Question 106

The financial statements of Juliet Company show the following: Beginning balance Ending balance Trade receivables \ 28,000 \ 22,000 Trade payables \ 11,000 \ 15,000 Purchases \ 74,000 How much cash was paid out to suppliers?

(Multiple Choice)

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Question 107

Randy, Inc., issued $50,000 of bonds, paid cash dividends of $8,000, sold long-term investments for $12,000, received $5,000 of dividend revenue, purchased treasury shares for $15,000, and purchased new equipment for $19,000. What is the net cash flow from financing activities?

(Multiple Choice)

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Question 108

Selected transactions of Horner Inc. are listed below.Classify each transaction

Common shares are sold for cash.

an operating activity

Bonds payable are issued for cash at a discount.

an investing activity

Interest on a short-term note receivable is collected.

a financing activity

Correct Answer:

Verified

Common shares are sold for cash.

Bonds payable are issued for cash at a discount.

Interest on a short-term note receivable is collected.

Merchandise is sold to customers for cash.

(Matching)

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Question 109

A stable, mature company may typically have which of the following patterns of cash ﬂows?

(Multiple Choice)

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Question 110

Any item that appears on the statement of earnings would be considered either a cash inﬂow or cash outﬂow from operating activities.

(True/False)

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Question 111

A comparative balance sheet for Austin Corporation is presented below: Assets Cash \ 39,000 \ 31,000 Trade receivables (net) 73,000 60,000 Prepaid insurance 19,000 17,000 Land 18,000 40,000 Equipment 70,000 60,000 Accumulated depreciation (20,000 (13,000 Total assets \ 199,000 \ 195,000 Liabilities and Shareholders' Equity Trade payables \ 11,000 \ 6,000 Bonds payable 27,000 19,000 Common shares 140,000 115,000 Retained earnings 21,000 Total liabilities and shareholders' equity \ 199,000 \ 195,000 Additional information for 20X7: 1. Net loss for 20X7 is $25,000. 2. Cash dividends of $9,000 were declared and paid in 20X7 . 3. Land was sold for cash at a loss of $10,000. This was the only land transaction during the year . 4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash. 5. $12, 000 of bonds were retired during the year at their carrying amount. 6. Equipment was acquired for common shares. The fair value of the shares at the time of the exchange was $25,000. Prepare a cash ?ow statement for the year ended 20X7, using the indirect method.

(Essay)

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Question 112

A company has incurred some routine maintenance costs. If they decide to capitalize these costs instead of expensing them, what would be the effect on cash from operations and cash from investing activities in that period?

(Multiple Choice)

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Question 113

Winn Company's 20X2 income statement reported total revenues, $110,000, and total expenses (including $10,000 depreciation), $70,000 . The 20X2 balance sheet reported the following: trade receivables--beginning balance, $16,000 and ending balance, $14,000; wages payable--beginning balance, $2,000 and ending balance, $1,500. Therefore, based only on this information, the 20X2 net cash inflow from operating activities was which of the following?

(Multiple Choice)

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Question 114

Expenses reported on the income statement for 20X1 (the first year of operations), totaled $60,000, which included depreciation expense of $8,000, and wages payable increased by $3,000 by the end of 20X1. Therefore, the 20X1 cash outflow for expenses was $71,000.

(True/False)

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Question 115

Crocker Inc. had the following activity during 20X7: Proceeds from sale of bonds payable \ 200,000 Loss from disposal of equipment (Net book value \ 60,000) \ 38,000 Dividends paid to shareholders \ 25,000 Sale of shares \ 125,000 Gain on the sale of short term investments \ 75,000 What is the cash flow from investing activities?

(Multiple Choice)

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Question 116

In 20X3, C Co. reported a quality of earnings ratio of 1.60. In 20X2 and 20X1 the ratio was .97 and .98 respectively. Which of the following was the most likely cause of the large increase in the ratio?

(Multiple Choice)

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Question 117

Cash collected from customers is a cash ﬂow from a ﬁnancing activity.

(True/False)

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Question 118

When a cash dividend is paid, the cash outﬂow is classiﬁed as an operating activity.

(True/False)

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Question 119

For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash and which of the following is correct?

(Multiple Choice)

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Question 120

Which one of the following items is not generally used in preparing a statement of cash ﬂows?

Under the indirect approach adjustments must be made to net income in the operations section for all of the following items, except

The purchase of a piece of equipment in exchange for common shares must be reported on the statement of cash ﬂows.

The financial statements of Juliet Company show the following: Beginning balance Ending balance Trade receivables \ 28,000 \ 22,000 Trade payables \ 11,000 \ 15,000 Purchases \ 74,000 How much cash was paid out to suppliers?

Randy, Inc., issued $50,000 of bonds, paid cash dividends of $8,000, sold long-term investments for $12,000, received $5,000 of dividend revenue, purchased treasury shares for $15,000, and purchased new equipment for $19,000. What is the net cash flow from financing activities?

A stable, mature company may typically have which of the following patterns of cash ﬂows?

Any item that appears on the statement of earnings would be considered either a cash inﬂow or cash outﬂow from operating activities.

A company has incurred some routine maintenance costs. If they decide to capitalize these costs instead of expensing them, what would be the effect on cash from operations and cash from investing activities in that period?

Expenses reported on the income statement for 20X1 (the first year of operations), totaled $60,000, which included depreciation expense of $8,000, and wages payable increased by $3,000 by the end of 20X1. Therefore, the 20X1 cash outflow for expenses was $71,000.

In 20X3, C Co. reported a quality of earnings ratio of 1.60. In 20X2 and 20X1 the ratio was .97 and .98 respectively. Which of the following was the most likely cause of the large increase in the ratio?

Cash collected from customers is a cash ﬂow from a ﬁnancing activity.

When a cash dividend is paid, the cash outﬂow is classiﬁed as an operating activity.

For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash and which of the following is correct?

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement Cash Flows

Measuring and Evaluating Financial Performance

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