41.How much cash was paid for insurance during 2015?
a.$5,400
b.$6,000
c.$6,600
d.$600
42.How will depreciation appear on Martinez’s statement of cash flows under the direct method?
a.Added in the operating activities section
b.Subtracted in the operating activities section
c.In the investing activities section since it relates to plant assets
d.It will not be reported since it is not a cash flow.
43.How much is Martinez’s cash flows from operations for 2015?
a.$28,400
b.$38,400
c.$23,600
d.$33,600
44.Selected information from Cooke Inc. is provided below for the years ending December 31, 2015 and 2014.
2015
2014
Accumulated depreciation
$32,000
$29,000
Equipment
60,000
55,000
During 2015, depreciation expense was recorded. New equipment was acquired for cash. Old equipment which was 70% depreciated with an original cost of $26,000 was sold for a gain of $4,000. What is the cost of the new equipment acquired?
a.$11,800
b.$5,000
c.$21,000
d.$31,000
45.The May 1 and May 31 balances in accounts receivable are $35,000 and $36,000, respectively. During May, the company reported sales totaling $235,000 from its customers. The company incurred $211,000 of expenses, although $12,000 was not paid as of May 31. How much is cash flows from operations for May?
a.$24,000
b.$37,000
c.$11,000
d.$35,000
Use the information for Forman Incorporated for the year ending December 31, 2015that follows to answers questions 46 and 47.
The following are relevant account balances from Forman Incorporated’s comparative balance sheet and 2015 income statement:
December 31, 2015
January 1, 2015
Accounts receivable
$ 22,000
$19,000
Unearned revenue
3,000
4,000
Salaries payable
8,000
5,000
Sales revenue
154,000
Salaries expense
88,000
46.Determine the amount of cash that Forman Incorporated collected from customers during 2015.
a.$150,000
b.$158,000
c.$151,000
d.$156,000
47.Determine the amount of cash that Forman Incorporated paid for salaries during 2015.
a.$91,000
b.$88,000
c.$85,000
d.$80,000
48.Johnson Company engaged in the following transactions during 2015:
1.Johnson wrote off an open receivable as uncollected.
2.Johnson purchased a piece of plant equipment
3.Johnson reacquired 5,000 shares of its common stock.
4.Johnson sold a building at a loss in exchange for a five-year note.
5.Johnson declared, but did not pay a cash dividend.
If Johnson uses the indirect method, which of these transactions or parts of these transactions would be included in the operating activity section of the statement of cash flows?
a. Transaction 4
b. Transaction 1
c. More than one of these transactions would be found in the operating activity section.
d. None of these transactions would be found in the operating activity section.
49.Johnson Company engaged in the following transactions during 2015:
1.Johnson wrote off an open receivable as uncollected.
2.Johnson purchased a piece of plant equipment
3.Johnson reacquired 5,000 shares of its common stock.
4.Johnson sold a building at a loss in exchange for a five-year note.
5.Johnson declared, but did not pay a cash dividend.
Which of these transactions or parts of these transactions would be included in the financing activity section of the statement of cash flows?
a. Transactions 2 and 4.
b. Transactions 2 through 5
c. Transaction 3
d. None of these choices are correct.
50.Johnson Company engaged in the following transactions during 2015:
1.Johnson wrote off an open receivable as uncollected.
2.Johnson purchased a piece of plant equipment
3.Johnson reacquired 5,000 shares of its common stock.
4.Johnson sold a building at a loss in exchange for a five-year note.
5.Johnson declared, but did not pay a cash dividend.
If Johnson uses the indirect method, which of these transactions or parts of these transactions would not appear on the statement of cash flows?
a. Transaction 1 and 5 only.
b. Transactions 4 and 5 only.
c. Transactions 1, 4, and 5.
d. None of these would appear on the statement of cash flows.
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