1/22/22, 6:53 PM Campus Management Solution @ IIFT

 Q.No.  Question  Options  Answer

 1.  True

 2.  False

 Both cash dividends received and interest received are

 1.  3.  -  2
considered to be investing inflows.

 4.  -

 5.  -

 1.  True

 2.  False

 A purchase of land in exchange for a long-term note payable is

 2.  2
reported in the investing section of the statement of cash flows  3.  -

 4.  -

 5.  -

 1.  True

 2.  False

 The purchase of stock in another company is considered to be

 3.  3.  -  2
a financing activity.

 4.  -

 5.  -

 1.  True

 2.  False
 When preparing the operating section of the statement of cash
 4. flows using the indirect method, non-operating gains are added  3.  -  2
back to net income.

 4.  -

 5.  -

 1.  True

 2.  False
 When preparing the operating section of the statement of cash
 5. flows using the indirect method, a decrease in accounts  3.  -  2
receivable is subtracted from net income.

 4.  -

 5.  -

 1.  True

 2.  False

 Financing activities include receiving cash dividends from

 6.  3.  -  2
investments in other companies' stocks.

 4.  -

 5.  -
 7.  The appropriate section in the statement of cash flows for  3
reporting the purchase of equipment for cash is:  1.  Operating activities.

 2.  Financing activities.

 3.  Investing activities.

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1/22/22, 6:53 PM Campus Management Solution @ IIFT
 4.  Schedule of noncash investing or financing activity.

 5.  None of these as this is not reported on the statement of cash flows.

 1.  Proceeds from collecting the principal amount of loans.

 2.  Repayment of principal on loans.

 Which one of the following is representative of typical cash

 8.  3.  Proceeds from the issuance of bonds and notes payable.  5
flows from operating activities?

 4.  Payments by a merchandiser to acquire equity securities of other companies.

 5.  Receipts of cash sales.

 1.  Net income.

 2.  Equity.

 A statement of cash flows should reconcile the differences

 9.  3.  Cash and cash equivalents.  3
between the beginning and ending balances of:

 4.  Working capital.

 5.  Cash, cash equivalents and short-term investments.

 1.  Decrease in income taxes payable.

 2.  Depreciation expense.

 When using the indirect method to calculate and report net
 10. cash provided or used by operating activities, which of the  3.  Amortization of intangible assets.  1
following is subtracted from net income?

 4.  Bad debts expense.

 5.  Decrease in merchandise inventory.

 1.  Credit sales.

 2.  Cash collections from customers.

 Which of the following transactions or events should be
 11. reported as a source of cash from operating activities when  3.  Depreciation expense.  2
using the direct method?

 4.  Cash received from the sale of a building.

 5.  Cash received from the sale of treasury stock.

 1.  $26,400

 Use the following information to calculate cash received from

 2.  $29,000
dividends:
Dividends revenue $29,800
 12.  3.  $29,800  2
Dividends receivable, January 1 2,600

Dividends receivable, December 31 3,400

 4.  $30,600

 5.  $32,400

 Assume the following information was available for the current  1.  $218,000
year's operations of the shoe company founded by Blake
Mycoskie, TOMS. Use these data to calculate the cash paid for
merchandise.  2.  $223,200
Cost of goods sold $226,000
 13. Merchandise inventory, January 1 54,800  3.  $220,000  2

Merchandise inventory, December 31 57,400

Accounts payable, January 1 54,400  4.  $228,800

Accounts payable, December 31 59,800

 5.  $234,000
 14.  A company's income statement showed the following: net  2
income, $124,000; depreciation expense, $30,000, and gain on  1.  $139,000
sale of plant assets, $14,000. An examination of the company's
current assets and current liabilities showed the following
 2.  $141,000
changes as a result of operating activities: accounts receivable
decreased $9,400; merchandise inventory increased $18,000;
 3.  $145,800

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1/22/22, 6:53 PM Campus Management Solution @ IIFT
prepaid expenses decreased $6,200; accounts payable
increased $3,400. Calculate the net cash provided or used by
operating activities.  4.  $155,000

 5.  $167,000
 Use the following information and the indirect method to
calculate the net cash provided or used by operating activities:  1.  $22,000
Cash paid for purchase of plant assets $15,000
Decrease in interest payable 2,000  2.  $117,000
Depreciation expense 30,000
 15.  3.  $69,000  4
Gain on retirement of bonds 32,000

Increase in accounts receivable 40,000

 4.  $37,000
Loss on sale of plant assets 5,000

Net Income 76,000  5.  $91,000

 1.  $3,000 outflow.

 2.  $60,000 outflow.

 A company reported that its bonds with a par value of $50,000
and a carrying value of $57,000 are retired for $60,000 cash,
 16.  2
resulting in a loss of $3,000. The amount to be reported under  3.  $57,000 outflow.
cash flows from financing activities is:
 4.  Zero. This is an operating activity.

 5.  Zero. This is an investing activity.

 
Cash provided by investing activities, $11,000
 1.
Cash provided by financing activities, $80,000

 
 Given the following information, determine the amount of cash  2. Cash used by investing activities, $80,000
flows from investing and financing activities. Cash used by financing activities, $11,000
Net income $70,000
 
Loss on sale of plant assets 25,000
Cash provided by investing activities, $80,000
 17.  3.  5
Cash received from sale of plant assets 36,000 Cash provided by financing activities, $36,000
Cash received from issuing stock 80,000  
Cash used by investing activities, $25,000
Increase in income taxes payable 20,000  4.
Cash used by financing activities, $36,000

 
Cash provided by investing activities, $36,000
 5.
Cash provided by financing activities, $80,000

 1.  $750,000

 A company had wage expense of $750,000 during a given  2.  $675,500

period. Compute cash paid for wages during this period given
the following data:
 18.  3.  $824,500  3
Particulars Beginning Balance Ending Balance
Wages Payable $100,000 $25,500
 4.  $74,500

 5.  $125,500

 1.  $254,700

 Net income of Lucky Company was $52,000. The accounting  2.  $47,300
records reveal depreciation expense of $99,000 as well as
 19. increases in prepaid rent, salaries payable, and income taxes  3.  $195,300  5
payable of $74,000, $15,700, and $14,000, respectively. What
is the net cash flow provided (used) by operating activities?
 4.  $150,700

 5.  $106,700

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