Question : Learning Objective 9-3 1) During its first year of business, Gnu, : 1252991

Learning Objective 9-3

1) During its first year of business, Gnu, Inc. sold $200,000 of merchandise to customers on account.  At the end of the year Gnu, Inc. had accounts receivable of $40,000. How much cash did the company collect from credit customers during the year?

A) $200,000

B) $240,000

C) $160,000

D) $40,000

2) On January 1, 2011, Company X had accounts receivable of $20,000. During the year, Company X sold $100,000 of merchandise to credit customers. At December 31, 2011, Company X had accounts receivable of $50,000. How much cash did the company collect from credit customers during the year?

A) $130,000

B) $120,000

C) $100,000

D) $70,000

3) On January 1, 2011, Company Z had accounts receivable of $5,000. During the year, Company Z sold $100,000 of merchandise to credit customers. At December 31, 2011, Company Z had accounts receivable of $4,000. How much cash did the company collect from credit customers during the year?

A) $105,000

B) $101,000

C) $99,000

D) $95,000

4) On January 1, 2011, Company Z had accounts receivable of $4,000. During the year, Company Z sold $100,000 of merchandise to credit customers. At December 31, 2011, Company Z had accounts receivable of $5,000. How much cash did the company collect from credit customers during the year?

A) $105,000

B) $101,000

C) $99,000

D) $95,000

5) During Clean Dirt, Inc.’s first year of business, salary expense was $60,000. At the end of its first year of business, Clean Dirt’s first balance sheet showed $5,000 of salaries payable. How much did Clean Dirt pay in cash for salaries during its first year of business?

A) $60,000

B) $55,000

C) $65,000

D) $5,000

6) Clean Dirt, Inc. had $8,000 of salaries payable at December 31, 2010. During 2011, Clean Dirt’s salary expense was $60,000. At December 31, 2011, Clean Dirt’s balance sheet showed $5,000 of salaries payable. How much did Clean Dirt pay in cash for salaries during 2011?

A) $60,000

B) $65,000

C) $63,000

D) $57,000

7) Cash from investing activities includes all cash receipts and cash disbursements for routine sales and purchases made in the course of doing business.

8) Cash collected from customers will be greater than the revenue for the same period if the accounts receivable balance increases.

9) Cash collected from customers will be less than the revenue for the same period if the accounts receivable balance increases.

10) Cash paid for salaries will be greater than the salary expense for the same period if the salary payable balance increases.

11) Cash paid for salaries will be less than the salary expense for the same period if the salary payable balance increases.

12) Team Shirts, Inc. recognized $48,000 in salaries and wages expense for the quarter. At the beginning of the quarter, the balance in Salaries payable was $6,000.  At the end of the quarter, the balance was $10,000. How is the accounting information for these items reported on the statement of cash flows using the direct method?