Question : Multiple Choice Questions 1.Pierce Corporation reported a $3,600 balance in accounts : 1257081

Multiple Choice Questions 

1.Pierce Corporation reported a $3,600 balance in accounts receivable on January 1, 2014. During the year, $24,800 of sales on account were made. During the year, Price wrote off accounts receivable of $1,700 as uncollectible. If the ending balance of accounts receivable is $2,000, what is the amount of cash received from customers?   

A. $21,200

 

B. $21,500

 

C. $28,400

 

D. $24,700

 

 

2.Bates Company pays cash for all inventory purchases. Bates reports that it had a beginning inventory of $2,500 and an ending inventory of $900. Its cost of goods sold was $5,500. Based on this information, the amount of cash paid for inventory purchases was:   

A. $3,900

 

B. $7,100

 

C. $1,400

 

D. $9,100

 

 

3.The following beginning and ending balances were drawn from the records of Grimes Company:  If Grimes Company sold equipment that had an original cost of $600 and accumulated depreciation of $300 for $250, how much did Grimes pay for new equipment?   

A. $255

 

B. $300

 

C. $200

 

D. $550

 

 

4.The Upton Company reported a beginning balance of $1,600 and an ending balance of $2,200 in its unearned revenue account for 2014. During the year, $8,000 of revenue was recognized. Based on this information, how much cash was received from customers?   

A. $8,000

 

B. $8,600

 

C. $8,200

 

D. $9,000

 

 

5.Bertram, Inc. had beginning and ending accounts payable balances of $400 and $450, respectively. Inventory had beginning and ending balances of $450 and $425, respectively. If cost of goods sold was $350, how much cash was spent to obtain inventory?   

A. $275

 

B. $250

 

C. $400

 

D. $350

 

 

6.On January 1, 2014, the balance of Fink Corporation’s accounts receivable was $10,000. Sales on account for 2014 amounted to $80,000 and the ending balance of accounts receivable was $16,000. What is the amount of cash collected from customers?   

A. $64,000

 

B. $90,000

 

C. $86,000

 

D. $74,000

 

 

7.The Ling Corporation reported a beginning balance of $1,200 in its prepaid insurance account for 2014. During the year, a total of $16,000 was recognized as insurance expense and the prepaid insurance account had an ending balance of $1,600. How much cash did Ling pay for insurance during 2014?   

A. $17,200

 

B. $16,000

 

C. $16,400

 

D. $14,800

 

 

8.The Valz Corporation had a balance in its equipment account on January 1, 2014 of $650,000. During the year, equipment originally costing $170,000 and having accumulated depreciation of $40,000, was sold for $134,000. The ending balance of the equipment account was $550,000. How much additional equipment was purchased during 2014?   

A. $70,000

 

B. $40,000

 

C. $170,000

 

D. $174,000

 

 

9.The Knott Company reported depreciation expense of $10,000 and net income of $16,000 on its 2014 income statement. During 2014 the company’s accounts receivable balance decreased by $4,000. Based on this information, what was the amount of cash flow from operating activities?   

A. $12,000.

 

B. 16,000.

 

C. $32,000.

 

D. $30,000.

 

 

10.Shaw Associates uses the indirect method for preparing the statement of cash flows. The following accounts and balances were drawn from the company’s accounting records:  Net income for the period was $42,000. The net cash flows from operating activities equals:   

A. $37,200.

 

B. $34,800.

 

C. $49,200.

 

D. $40,000.