Question :
91. During Year 7, Seven Corporation wrote down marketable equity securities : 1245793
91. During Year 7, Seven Corporation wrote down marketable equity securities to their market value. The journal entry made for this write-down is as follows:Unrealized Holding Loss on Marketable Equity SecuritiesAvailable for Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.000 Marketable Equity Securities Available for Sale . . . . . . . . . . . . . . . . . 7,000This entry A. does affect cash but does not appear in the statement of cash flows.B. does not affect cash but does appear in the statement of cash flows.C. does affect cash and does appear in the statement of cash flows.D. does not affect cash and does not appear in the statement of cash flows.E. none of the above
92. During Year 5, Taylor Corporation signed a long-term lease for a building. It classified the lease as a capital lease and recorded it in the accounts as follows:Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 Capitalized Lease Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000The transaction requires A. inclusion in the statement of cash flows as an operating activity, only.B. inclusion in the statement of cash flows as an investing activity, only.C. inclusion in the statement of cash flows as a financing activity, only.D. disclosure in a supplementary schedule or notes to the financial statements.E. disclosure in managements’ discussion and analysis.
93. Kendrick Company began the current year with the following:
Accounts receivable
$ 10,000
Allowance for doubtful accounts
(800)
Net account receivable
9,200
During the current year, the following events occurred:
Accounts written off
$ 1,200
Sales on account
30,000
Bad debt expense recognized
2,000
At the end of the current year, the company showed a balance in gross accounts receivable (before the allowance for doubtful accounts) of $16,800.What amount would be shown as an operating cash inflow in the statement of cash flows under the indirect method? A. $21,000B. $22,000C. $30,000D. $28,200
94. Zanies Corporation reports its income from investments under the equity method and recognized income of $15,000 from its investment in Travis Company during the current year. Travis declared no dividends during the current year. On Daniels’ statement of cash flows the $15,000 would A. be shown as cash from investing activities.B. be shown as an addition to net income in the reconciliation of net income to cash from operations.C. be shown as a deduction from net income in the reconciliation of net income to cash from operations.D. not be shown.E. None of these answers is correct.
95. The amortization of patents should be presented in a statement of cash flows prepared using the indirect method as a(n) A. inflow and outflow of cash.B. outflow of cash.C. addition to net income in the adjustments to reconcile net income to cash from operating activities.D. deduction from net income in the adjustments to reconcile net income to cash from operating activities.E. None of these answers is correct.
96. A company’s income statement disclosed $45,000 of investment revenue on equity method investments. The company did not purchase or dispose of any such investments during the year, yet the equity method investments account increased $30,000 during the year. What is the complete disclosure of these events in the statement of cash flows prepared under the indirect method? A. Operating cash inflow, $45,000; $30,000 subtraction in reconciliation of earnings and net operating cash flowB. Operating cash inflow, $15,000; $30,000 subtraction in reconciliation of earnings and net operating cash flowC. Operating cash inflow, $15,000D. $30,000 subtraction in reconciliation of earnings and net operating cash flowE. None of these answers is correct.
97. The amortization of bond discount related to long-term debt should be presented in a statement of cash flows prepared using the indirect method as a(n) A. inflow and outflow of cash.B. outflow of cash.C. deduction from net income in the adjustments to reconcile net income to cash from operating activities.D. addition to net income in the adjustments to reconcile net income to cash from operating activities.E. None of these is correct.
98. Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows? A. The balance in the allowance for doubtful accountsB. The change in net salesC. Sales returns and allowancesD. Collection of an account previously written offE. None of these answers is correct.
99. Which of the following transactions would not be reported in the one of the three main activity sections of the statement of cash flows prepared under the indirect method? A. A purchase of treasury stockB. A purchase of an operational asset by issuing common stockC. A loan made to another companyD. Patent amortizationE. A gain on the sale of a plant asset
100. A gain on the sale of a plant assets should be included in which of the following sections of a statement of cash flows prepared using the indirect method? A. Investing activitiesB. Operating activitiesC. Financing activitiesD. Non-cash investing and financing activitiesE. None of these answers is correct.
