Question : 91. Atkins Corporation has provided the following information for the year : 1228458

91. Atkins Corporation has provided the following information for the year ended December 31, 2010:
? The equipment account balance increased $200,000.
? The equipment accumulated depreciation account increased $35,000.
? Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
? Depreciation expense on the equipment recorded during the year was $65,000.
Which of the following statements is correct with respect to cash flow from operating activities determination? 
A. Using the indirect method, net income is increased by the $35,000 increase in accumulated depreciation.
B. Using the indirect method, net income is decreased by the $60,000 sales price of the equipment.
C. Using the indirect method, net income is increased by the $65,000 depreciation expense.
D. Using the indirect method, net income is increased by the $10,000 gain on the sale of the equipment.

92. Atkins Corporation has provided the following information for the year ended December 31, 2010:
? The equipment account balance increased $200,000.
? The equipment accumulated depreciation account increased $35,000.
? Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
? Depreciation expense on the equipment recorded during the year was $65,000.
Which of the following statements is correct with respect to cash flow from investing activities determination? Assume that the equipment purchase and sale resulted in cash flows. 
A. A $60,000 cash inflow is reported from the equipment sale.
B. A $200,000 cash outflow is reported for equipment purchases.
C. A $50,000 cash outflow is reported for the equipment sale.
D. A $250,000 cash outflow is reported for equipment purchases.

93. Atkins Corporation has provided the following information for the year ended December 31, 2010:
? The equipment account balance increased $200,000.
? The equipment accumulated depreciation account increased $35,000.
? Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
? Depreciation expense on the equipment recorded during the year was $65,000.
Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows. 
A. A $30,000 cash inflow is reported from the equipment sale.
B. Using the indirect method, net income is increased by the $65,000 depreciation expense.
C. Using the indirect method, net income is decreased by the $10,000 gain on the sale of the equipment.
D. A $60,000 cash inflow is reported from the equipment sale.

94. Atkins Corporation has provided the following information for the year ended December 31, 2010:
? The equipment account balance increased $200,000.
? The equipment accumulated depreciation account increased $35,000.
? Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.
? Depreciation expense on the equipment recorded during the year was $65,000.
How much was the investing activities cash inflow from the sale of the equipment? Assume that the equipment purchase and sale resulted in cash flows. 
A. $30,000
B. $60,000
C. $40,000
D. $50,000

95. A company reported an increase in accounts payable and a decrease in inventory during 2010. Which of the following statements is correct? 
A. Cash paid to suppliers equals cost of goods sold plus both the increase in accounts payable and the decrease in inventory.
B. Cash paid to suppliers equals cost of goods sold minus both the increase in accounts payable and the decrease in inventory.
C. Cash paid to suppliers equals cost of goods sold minus the increase in accounts payable, plus the decrease in inventory.
D. Cash paid to suppliers equals cost of goods sold plus the increase in accounts payable, minus the decrease in inventory.

96. A company reported an increase in accounts receivable and an increase in unearned revenues during 2010. Which of the following statements is correct? 
A. Cash collected from customers equals sales revenues plus both the increase in accounts receivable and the increase in unearned revenues.
B. Cash collected from customers equals sales revenues minus both the increase in accounts receivable and the increase in unearned revenues.
C. Cash collected from customers equals sales revenues plus the increase in accounts receivable, minus the increase in unearned revenues.
D. Cash collected from customers equals sales revenues minus the increase in accounts receivable, plus the increase in unearned revenues.

97. A company reported an increase in prepaid rent and an increase in accrued liabilities during 2010. Which of the following statements is correct? 
A. When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are deducted from operating expenses.
B. When determining cash paid for operating expenses, both the increase in prepaid rent and the increase in accrued liabilities are added to operating expenses.
C. When determining cash paid for operating expenses, the increase in prepaid rent is added to operating expenses and the increase in accrued liabilities is deducted from operating expenses.
D. When determining cash paid for operating expenses, the increase in prepaid rent is deducted from operating expenses and the increase in accrued liabilities is added to operating expenses.

98. A company reported an increase in accrued revenues and a decrease in unearned revenues during 2010. Which of the following statements is correct? 
A. When determining cash collected from customers, both the increase in accrued revenues and the decrease in unearned revenues are deducted from sales revenues.
B. When determining cash collected from customers, both the increase in accrued revenues and the decrease in unearned revenues are added to sales revenues.
C. When determining cash collected from customers, the increase in accrued revenues is deducted from sales revenues and the decrease in unearned revenues is added to sales revenues.
D. When determining cash collected from customers, the increase in accrued revenues is added to sales revenues and the decrease in unearned revenues is deducted from sales revenues.

99. Which of the following transactions increases the quality of income ratio? 
A. The accrual of revenue.
B. The accrual of an expense.
C. The cash payment of an account payable.
D. The payment of a cash dividend.

100. Which of the following transactions decreases the quality of income ratio? 
A. The cash purchase of equipment.
B. The issue of stock in exchange for cash.
C. Collecting cash for services to be provided in the future.
D. Earning revenue which was previously recorded as unearned revenue.