Question : 97.              Which of the following adjustments to convert net income : 1311964

 

 

97.              Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?

Add to Net IncomeDeduct from Net Income

a.Accounts Receivabledecreaseincrease

b.Prepaid Expensesincreasedecrease

c.Inventorydecreaseincrease

d.Accounts Payableincreasedecrease

 

 

98.              Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

a.Gain on Sale of Equipment

b.Depreciation Expense

c.Amortization Expense

d.Depletion Expense

 

 

99.              Using the indirect method, if equipment is sold at a gain, the

a.sale proceeds received are deducted in the operating activities section.

b.sale proceeds received are added in the operating activities section.

c.amount of the gain is added in the operating activities section.

d.amount of the gain is deducted in the operating activities section.

 

 

100.A company had net income of $210,000. Depreciation expense is $26,000. During the year, Accounts Receivable and Inventory increased $15,000 and $40,000, respectively. Prepaid Expenses and Accounts Payable decreased $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much cash was provided by operating activities?

a.$176,000

b.$182,000

c.$256,000

d.$268,000

 

 

101.On the statement of cash flows using the indirect method, patent amortization expense will

a.be added to net income in the operating section.

b.be deducted from net income in the operating section.

c.appear as an inflow of cash in the investing section.

d.appear as an outflow of cash in the investing section.

 

102.The indirect and direct methods of preparing the statement of cash flows are identical except for the

a.significant noncash activity section.

b.operating activities section.

c.investing activities section.

d.financing activities section.

 

 

103.Land acquired from the issuance of common stock is reported

a.as a financing activity.

b.as an investing activity.

c.as an operating activity.

d.in a separate schedule at the bottom of the statement.

 

 

104.In Numar Company, Treasury Stock increased $25,000 from a cash purchase, and Retained Earnings increased $75,000 as a result of net income of $120,000 and cash dividends paid of $45,000. Net cash used by financing activities is:

a.$25,000.

b.$45,000.

c.$120,000.

d.$70,000.

 

 

105.In Flagg Company, net income is $280,000. If accounts receivable increased $145,000 and accounts payable decreased $50,000, net cash provided by operating activities using the indirect method is:

a.$85,000.

b.$185,000.

c.$375,000.

d.$475,000.

 

 

106.In Stretch Company, there was an increase in the land account during the year of $48,000. Analysis reveals that the change resulted form a cash sale of land at cost $110,000, and a cash purchase of land for $158,000. In the statement of cash flows, the change in the land account should be reported in the investment section:

a.as a net purchase of land, $48,000.

b.only as a purchase of land $158,000.

c.as a purchase of land $158,000 and a sale of land $110,000.

d.only as a sale of land $110,000.

 

 

 

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