39.Selected information from Rockway, Inc.’s U.S. GAAP financial statements for the year ended December 31, included the following (in $):

Using the direct method, cash provided or used by operating activities(CFO) in the year 2005 was:

A)   $4,300,000.

B)   $5,300,000.

C)   $6,300,000.

D)   $3,500,000.

40.Juniper Corp. has the following transactions in 2005.

§       Juniper’s equipment with a book value of $55,000 was sold for $85,000 cash.

§       A parcel of land was purchased for $100,000 worth of Juniper common stock.

§       ABC company paid Juniper preferred dividends of $40,000.

§       Juniper declared and paid a $100,000 cash dividend.

Using the indirect method, what is cash flow from financing (CFF) for Juniper for 2005?

A)   -$60,000.

B)   -$100,000.

C)   -$15,000.

D)   -$115,000.

答案和详解如下：

39.Selected information from Rockway, Inc.’s U.S. GAAP financial statements for the year ended December 31, included the following (in $):

	2004	2005
Sales	17,000,000	21,000,000
Cost of Goods Sold	11,000,000	15,000,000
Interest Paid	800,000	1,000,000
Current Income Taxes Paid	700,000	1,000,000
Accounts Receivable	3,000,000	2,500,000
Inventory	2,400,000	3,000,000
Property, Plant & Equip.	2,000,000	16,000,000
Accounts Payable	1,000,000	1,400,000
Long-term Debt	8,000,000	9,000,000
Common Stock	4,000,000	5,000,000

Using the direct method, cash provided or used by operating activities(CFO) in the year 2005 was:

A)   $4,300,000.

B)   $5,300,000.

C)   $6,300,000.

D)   $3,500,000.

The correct answer was A)

Cash provided or used by operating activities under the direct method is computed by adding cash inflows and subtracting cash inputs and cash outflows. Operating Cash inflows for Rockway Inc. for 2005 came from sales ($21,000,000) and decrease in accounts receivable ($3,000,000 - $2,500,000 = $500,000) for net cash inflows of ($21,000,000 + $500,000 =) $21,500,000. Operating cash inputs were cost of goods sold ($15,000,000), plus the increase in inventory ($3,000,000 - $2,400,000 = $600,000) less the increase in accounts payable, (which is a source of funds) ($1,000,000 - $1,400,000 = -$400,000) for net cash inputs of ($15,000,000 + $600,000 - $400,000 =) $15,200,000. Other operating cash outflows were interest paid ($1,000,000) and current income taxes paid ($1,000,000) totaling ($2,000,000). Cash provided by operations was ($21,500,000 - $15,200,000 - $2,000,000 =) $4,300,000. Changes in property, plant and equipment, long-term debt and common stock do not affect cash from operations.

40.Juniper Corp. has the following transactions in 2005.

§       Juniper’s equipment with a book value of $55,000 was sold for $85,000 cash.

§       A parcel of land was purchased for $100,000 worth of Juniper common stock.

§       ABC company paid Juniper preferred dividends of $40,000.

§       Juniper declared and paid a $100,000 cash dividend.

Using the indirect method, what is cash flow from financing (CFF) for Juniper for 2005?

A)   -$60,000.

B)   -$100,000.

C)   -$15,000.

D)   -$115,000.

The correct answer was B)

The only item involving cash flow from financing (CFF) was the payment of a cash dividend by Juniper. The sale of equipment affects cash flow from investing (CFI), the purchase of land has no effect on cash, and the preferred dividends received are cash flow from operations.