Q5. Use the following information to calculate cash flows from operations using the indirect method. - Net Income: $12,000
- Depreciation Expense: $1,000
- Loss on sale of machinery: $500
- Increase in Accounts Receivable: $2,000
- Decrease in Accounts Payable: $1,500
- Increase in Income taxes payable: $500
- Repayment of Bonds: $3,000
A) Increase in cash of $7,500. B) Increase in cash of $9,500. C) Increase in cash of $10,500.
Q6. An analyst compiled the following information for Universe, Inc. for the year ended December 31, 20X4: - Net income was $850,000.
- Depreciation expense was $200,000.
- Interest paid was $100,000.
- Income taxes paid were $50,000.
- Common stock was sold for $100,000.
- Preferred stock (eight percent annual dividend) was sold at par value of $125,000.
- Common stock dividends of $25,000 were paid.
- Preferred stock dividends of $10,000 were paid.
- Equipment with a book value of $50,000 was sold for $100,000.
Using the indirect method and assuming U.S. GAAP, what was Universe Inc.’s cash flow from operations (CFO) for the year ended December 31, 20X4? A) $1,050,000. B) $1,015,000. C) $1,000,000.
Q7. When using the indirect method for computing cash flow from operating activities, a change in accounts payable will require which of the following?
A) A positive (negative) adjustment to net income when accounts payable increases (decreases). B) A negative (positive) adjustment to net income when accounts payable increases (decreases). C) A negative adjustment to net income regardless of whether accounts payable increases or decreases.
Q8. Given the following information, what is the adjustment to net income when calculating cash flow from operations using the indirect method? - Increase in accounts payable of $25.
- Sold one share of stock for $15.
- Paid dividends of $10 to shareholders.
- Depreciation expense of $100.
- Increase in inventory of $20.
A) -$50. B) -$95. C) +$105.
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发表于 2009-1-17 13:52
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