答案和详解如下： 1.When preparing cash flow statements using the direct method and the indirect method, an increase in accrued liabilities for rent during the year would result in what adjustment to “rent expense” recorded on the income statement?
| Direct method
| Indirect method
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A) Increase Decrease B) Decrease Decrease C) Decrease Increase D) Increase Increase The correct answer was B) Under both the direct and indirect methods of presenting cash flow from operating activities, an increase in an accrued liability for rent expense will result in a decrease in rent expense to calculate cash rent paid. 2.For the year ended December 31, 2007, Challenger Company reported the following financial information: Revenue | $100,000 | Cost of goods sold | (40,000) | Cash operating expenses | (20,000) | Depreciation expense | (5,000) | Tax expense | (3,000) | Net income | $32,000 | |
| Increase in accounts receivable | $7,500 | Decrease in inventory | $2,500 | Increase in short-term notes payable | $3,000 | Decrease in accounts payable | $1,000 |
Calculate cash flow from operating activities using the direct method and the indirect method.
| Direct method
| Indirect method
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A) $31,000 $34,000 B) $34,000 $34,000 C) $34,000 $31,000 D) $31,000 $31,000 The correct answer was D) CFO is the same under both methods, the only difference is presentation. Direct method: $92,500 cash collections ($100,000 revenue – $7,500 increase in receivables) – $38,500 cash paid to suppliers (– $40,000 COGS + $2,500 decrease in inventory – $1,000 decrease in payables) – $20,000 cash operating expenses – $3,000 tax expense = $31,000. Indirect method: $32,000 net income + $5,000 depreciation expense – $7,500 increase in receivables + $2,500 decrease in inventory – $1,000 decrease in payables = $31,000. The increase in short-term notes payable is a financing activity. | 
发表于 2008-4-11 17:25
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