Question : 21) When comparing net cash provided by operating activities using : 1171190

21) When comparing net cash provided by operating activities using the indirect versus direct methods:

A) net cash is higher using the indirect method.

B) net cash is lower using indirect method.

C) there is no difference between the two methods.

D) depreciation expense is used in the direct method.

22) Rick Corporation’s Accounts Receivable increased by $25,000 during the year. What is the adjustment to the cash flow statement when it is prepared by the indirect method?

A) Subtract the increase from the net income in operating activities section.

B) Add the increase to the net income in operating activities section.

C) Add the increase in the investing activities section.

D) Subtract the increase in the financing activities section.

23) Collins Corporation reported net income of $35,000; depreciation expenses of $20,000; a decrease in Accounts Payable of $2,000; and an increase in Accounts Receivable of $3,000. Net cash flow from operating activities using the indirect method is:

A) $55,000.

B) $54,000.

C) $50,000.

D) $56,000.

24) Smith Corporation reported net income of $54,000, depreciation expenses of $10,000, an increase in Accounts Payable of $3,000 and a decrease in Accounts Receivable of $1,500. Under the indirect method, net cash flow from operating activities is:

A) $62,500.

B) $59,500.

C) $68,500.

D) $65,500.

25) Trundle Corporation reported net income of $40,000; depreciation expense of $11,000; sales of additional common shares of $20,000; and an increase in Accounts Payable of $7,000. Net cash flow from operating activities using the indirect method is:

A) $41,000.

B) $32,000.

C) $33,000.

D) $58,000.

26) Big Toy Corporation’s records show net income of $20,000; depreciation expense of $10,000; and cash dividends declared and paid of $4,000. The amount of cash provided by operating activities using the indirect method is:

A) $40,000.

B) $30,000.

C) $20,000.

D) $10,000.

27) Carmen’s Candies’ Net Income was $40,000. Other accounts that changed included: Accounts Receivable decreased by $30,000; Merchandise Inventory increased by $20,000; Accounts Payable increased by $4,000; and Salaries Payable increased by $1,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

A) $33,000.

B) $47,000.

C) $55,000.

D) $61,000.

28) Fidelity Furniture’s Net Income was $25,000. Other accounts that changed included: Accounts Receivable increased by $18,000; Merchandise Inventory decreased by $7,000; Accounts Payable increased by $4,000; and Salaries Payable decreased by $3,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

A) $57,000.

B) $43,000.

C) $37,000.

D) $15,000.

29) Which of the following items would be subtracted from Net Income to compute Net Cash Flow from Operating Activities under the indirect method?

A) A decrease in Merchandise Inventory

B) An increase in Accrued Payables

C) A decrease in Accounts Payable

D) A decrease in Prepaid Insurance

30) The records of Ashley Boutique showed Net Loss, $30,000; Depreciation Expense, $25,000; and decrease in Supplies on Hand, $25,000. The amount of Net Cash Flow from Operating Activities using the indirect method is:

A) $15,000.

B) $20,000.

C) ($10,000).

D) ($15,000).