Question : 131. The product life-cycle concept from microeconomics and marketing provides useful : 1245797

131. The product life-cycle concept from microeconomics and marketing provides useful insights into the relations between cash flows from operating, investing, and financing activities. In the United States, which phase best describes:        Biotechnology firms             Consumer foods companies         Steel manufacturers A.              growth                                         mature                                      decline B.              mature                                         decline                                      growthC.              growth                                         growth                                      declineD.              growth                                         growth                                       matureE.              decline                                         mature                                       growth                                     

132. The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations. _____ will likely show a substantial addback to net income for depreciation expense, whereas _____will show a smaller amount.  A. Service firms; firms that decrease in size B. Service firms; firms that increase in size C. Firms that decrease in size;  firms that increase in size D. Service firms; capital-intensive firmsE. Capital-intensive firms; service firms

133. The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations.  _____ usually show an addback for deferred tax expense, whereas firms that _____ show a subtraction.   A. Rapidly growing firms;  have operating lossesB. Firms that have operating losses; are profitableC. Profitable firms; have operating lossesD. Firms that stop growing or that shrink; rapidly growing firmsE. Rapidly growing firms; stop growing or that shrink

134. For each of the following items: 

1.

identify whether the adjustment is an addition or a subtraction in preparing the statement of cash flows using the indirect method, and

2.

state which section of the statement of cash flows the addition or subtraction should be reported.

a. amortization of patent

b. bond premium amortization

c. increase in deferred taxes (hint: a liability)

d. sale of equipment

135. Dmitri Company reported the following changes in the balance sheet accounts between Year 1 and Year 2. 

Cash

$100 

Accounts receivable

(50)

Inventory

80 

Equipment

100 

Accumulated depreciation

(20)

Prepaid insurance

(10)

Accounts payable

(20)

Warranties payable

(10)

Deferred tax liability

(10)

Notes payable

(110)

Retained earnings

(30)

Common stock

0 

Preferred stock

(20)

Assume that there were no sales of equipment and that no dividends were declared or paid.Required:Given the changes in the balance sheet for Year 2, state:

a.

whether the change in each account indicates that an addition or subtraction needs to be made to determine cash flow, and

b.

in what section of the statement of cash flows the adjustment would appear. Indicate if no adjustment is necessary.