Question : 51.First National Eatery prepares its statement of cash flows using : 1302919

51.First National Eatery prepares its statement of cash flows using the indirect method. The statement reported that cash provided by operating activities for the year was $7,000. If the company experienced a $14,000 decrease in accounts receivable, a $13,000 decrease in accounts payable, and a $4,000 increase in inventory during the year, how much is the company’s net income/(loss) for the year?

A.($3,000)

B.$4,000

C.($16,000)

D.$10,000

52.Kermit Productions purchased $44,000 worth of stock in the Enterprise Company in 2010. In 2014, the stock was sold for $87,000. Which one of the following is one effect of this transaction on the statement of cash flows if the indirect method is used during 2014?

A.An addition of $43,000 in the investing activities section

B.A subtraction of $43,000 in the investing activities section

C.A subtraction from net income of $43,000 in the operating activities section

D.An addition to net income of $87,000 in the operating activities section

53.Which is the most important item in a company’s statement of cash flows?

A.Positive operating cash flows

B.Positive operating, investing, and financing cash flows

C.Positive operating and investing cash flows

D.Positive operating and financing cash flows

54.In addition to cash flows that occurred during the period, which of the following amounts listed below appear on the statement of cash flows prepared using the direct method?

I.Beginning balance of cash and cash equivalents

II.Ending balance of cash and cash equivalents

III.Net income

A.I and II

B.II and III

C.I and III

D.I, II, and III

55.During 2014, Thomas Windows completed the following transactions:

                  Purchased equipment for $41,000 cash that will be depreciated over a 10-year life

                  Sold equipment that had an original cost of $46,000 and accumulated depreciation of $43,000 for $7,000 cash

The January 1, 2014 balance in the accumulated depreciation account was $134,000 and the December 31, 2014 balance was $145,000. How much depreciation expense will Thomas Windows report on the company’s 2014 statement of cash flows if the indirect method is used?

A.$32,000

B.$54,000

C.$14,000

D.$57,000

56.Natural Market’s statement of cash flows showed the following totals:

Cash for operating activities              ($45,000)

Cash from financing activities              32,000

Cash from investing activities              28,000

Which statement most likely explains what occurred during the year?

A.Natural Market is using cash from operations and borrowing money from the bank to buy long-term assets.

B.Natural Market is using its profits in order to sell plant assets and repay debt.

C.Natural Market is using cash from the sale of long-term assets to fund its operations and to repay debt.

D.Natural Market is selling long-term assets and borrowing cash to fund operations.

57.How is cash paid for interest on a mortgage classified on a statement of cash flows?

A.As an investing activity

B.As an operating activity

C.As a financing activity

D.As a receiving activity

58.If a company sells equipment with accumulated depreciation totaling $4,200 and an original cost of $5,100, for a loss of $400, what amount will appear in the investing activities section of the statement of cash flows?

A.$500 inflow

B.$400 inflow

C.$900 inflow

D.$4,700 inflow

59.How is the repurchase of a company’s own stock classified on the statement of cash flows?

A.As an investing activity

B.As an operating activity

C.As a financing activity

D.As a non-cash activity

60.How is the payment of previously accrued salaries reported on the statement of cash flows?

A.As an investing activity

B.As an operating activity

C.As a financing activity

D.As a non-cash activity