Question : 41. The payment of a cash dividend will be depicted the : 1291651

 

41. The payment of a cash dividend will be depicted on the statement of cash flows as a: A. cash inflow from an operating activity.B. cash outflow for an investing activity.C. cash outflow for a financing activity.D. cash outflow for an operating activity.

 

42. Burrows Inc. had an outstanding loan at the beginning of 2011 totaling $50,000. During 2011, $16,800 was paid out related to this loan broken down as follows: $15,000 towards principal and $1,800 in interest. Which of the following statements is correct regarding how the $16,800 payment should be depicted on the statement of cash flows? A. The entire $16,800 should be shown as a cash outflow for financing activities.B. The entire $16,800 should be shown as a cash outflow for investing activities.C. The $15,000 principal portion should be shown as a cash outflow for financing activities, and the $1,800 in interest should be shown as a cash outflow for operating activities.D. The $15,000 principal portion should be shown as a cash outflow for investing activities, and the $1,800 in interest should be shown as a cash outflow for operating activities.

 

43. Felton Inc. had the following information related to last year’s purchases: 

Cost of goods purchased

$300,000

Accounts payable – beginning

12,500

Accounts payable – ending

20,000

 

 

What amount would be reported as “cash outflows for purchases” on the statement of cash flows using the direct method? A. $307,500B. $292,500C. $312,500D. $280,000

 

44. Clyde’s Clothing Inc. comparative balance sheets and income statements showed the following information for 2010 and 2011: 

Inventory – 12/31/2010

$  60,000

Inventory – 12/31/2011

75,000

Accounts payable – 12/31/2010

18,000

Accounts payable – 12/31/2011

20,000

Cost of goods sold – 2011

400,000

 

 

Clyde’s accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory. What is the amount of cash payments for inventory that Clyde should report on its 2011 statement of cash flows assuming that the direct method is used? A. $387,000B. $413,000C. $497,000D. $303,000

 

45. Skipper’s Souvenir Shop had comparative balance sheets and income statements that showed the following information for 2010 and 2011: 

Inventory – 12/31/10

$100,000

Inventory – 12/31/11

85,000

Accounts payable – 12/31/10

20,000

Accounts payable – 12/31/11

15,000

Cost of goods sold – 2011

700,000

 

 

Skipper’s accounts payable balances are composed solely of amounts due to suppliers for purchases of inventory. What is the amount of cash payments for inventory that Skipper should report on its 2011 statement of cash flows assuming that the direct method is used? A. $690,000B. $710,000C. $850,000D. $550,000

 

46. Gregson Company had the following noncash current asset and current liabilities balances at the end of 2010 and 2011: 

 

2010

 

2011

Accounts receivable

$  60,000

 

$  68,000

Inventory

230,000

 

210,000

Prepaid insurance

15,000

 

13,000

Accounts payable

20,000

 

30,000

 

 

 

 

Net income for 2011 was $750,000 and depreciation expense was $40,000. All sales and all purchases are on account. Gregson uses the indirect method for preparing the statement of cash flows.Net cash flows from operating activities for 2011 would be: A. $814,000B. $774,000C. $786,000D. $766,000

 

47. Atlantic Inc. had the following noncash current asset and current liabilities balances at the end of 2010 and 2011: 

 

2010

 

2011

Accounts receivable

$  50,000

 

$  42,000

Inventory

190,000

 

160,000

Prepaid insurance

10,000

 

6,000

Accounts payable

25,000

 

30,000

 

 

 

 

Net income for 2011 was $940,000 and depreciation expense was $25,000. All sales and all purchases are on account. Atlantic uses the indirect method for preparing the statement of cash flows.Net cash flows from operating activities for 2011 would be: A. $   918,000B. $1,012,000C. $1,002,000D. $   987,000

 

48. Crenshaw Inc. had the following information related to last year’s purchases: 

Cost of goods purchased

$510,000

Accounts payable – beginning

35,000

Accounts payable – ending

18,000

 

 

What amount would be reported as “cash outflows for purchases” on the statement of cash flows using the direct method? A. $527,000B. $493,000C. $475,000D. $457,000

 

49. Haley Inc. had the following information related to last year’s purchases: 

Cost of goods purchased

$85,000

Accounts payable – beginning

3,000

Accounts payable – ending

5,000

 

 

What amount would be reported as “cash outflows for purchases” on the statement of cash flows using the direct method? A. $93,000B. $87,000C. $77,000D. $83,000

 

50. Caldwell Corp.’s cost of goods purchased amounts to $900,000 for 2011. From the beginning until the end of 2011, their accounts payable decreased by a net amount of $95,000. How much “cash outflows for purchases” should Caldwell report for 2011 on their statement of cash flows? A. $  95,000B. $900,000C. $995,000D. $805,000

 

 

 

 

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