81. The indirect method for the preparation of the operating activities section of the statement of cash flows: A. Separately lists each major item of operating cash receipts.B. Separately lists each major item of operating cash payments.C. Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities.D. Is required if the company is a merchandiser.E. Must not be used in all circumstances.
82. The direct method of reporting operating cash flows: A. Is recommended but not required by the FASB.B. Must be used by all companies.C. Is used by most companies.D. Is considered supplementary disclosure.E. Is not recommended by the FASB, but is commonly used.
83. If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n): A. Operating activity.B. Investing activity.C. Financing activity.D. Noncash investing and financing activity.E. None of these. This is not reported in the statement of cash flows.
84. Use the following information to calculate cash received from dividends:
Dividends revenue
$29,800
Dividends receivable, January 1
2,600
Dividends receivable, December 31
3,400
A. $26,400B. $29,000C. $29,800D. $30,600E. $32,400
85. Use the following information to calculate cash paid for wages and salaries:
Salaries expense
$168,000
Salaries payable, January 1
6,400
Salaries payable, December 31
10,600
A. $157,400B. $163,800C. $168,000D. $172,200E. $174,400
86. Use the following information to calculate cash paid for salaries:
Salaries expense
$79,000
Salaries payable, January 1
6,400
Salaries payable, December 31
3,320
A. $75,680B. $82,080C. $79,000D. $85,400E. $82,320
87. When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income? A. Decrease in income taxes payable.B. Depreciation expense.C. Amortization of intangible assets.D. Bad debts expense.E. Decrease in merchandise inventory.
88. A company’s inventory balance was $200,000 at 12/31/11 and $188,000 at 12/31/12. Its accounts payable balance was $80,000 at 12/31/11 and $84,000 at 12/31/12, and its cost of goods sold for 2012 was $720,000. The company’s total amount of cash payments for merchandise in 2012 equals: A. $704,000B. $712,000C. $720,000D. $728,000E. $736,000
89. Assume the following information was available for the current year’s operations of the shoe company founded by Blake Mycoskie, TOMS. Use these data to calculate the cash paid for merchandise.
Cost of goods sold
$226,000
Merchandise inventory, January 1
54,800
Merchandise inventory, December 31
57,400
Accounts payable, January 1
54,400
Accounts payable, December 31
59,800
A. $218,000B. $223,200C. $220,000D. $228,800E. $234,000
90. Use the following information about the current year’s operations of a company to calculate the cash paid for merchandise.
Cost of good sold
$536,000
Merchandise inventory, January 1
64,800
Merchandise inventory, December 31
57,000
Accounts payable, January 1
64,400
Accounts payable, December 31
59,000
A. $522,800B. $533,600C. $528,200D. $536,000E. $543,800
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