Ch 10-11

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?

• Inventory increase

• Gain on the sale of land

• Accounts receivable increase

• Salaries payable increase

Assume net income was $210,000, depreciation expense was $6300, accounts receivable increased by

$8500, and accounts payable decreased by $2800. The amount of net cash flows from operating

activities is:

• 203,700

• 205,000

• 216,300

• 222,000

Using the information below, calculate net cash flows from operating activities:

Net income: 120,000

Receive cash from issuing stock : 80,000

Pay cash for equipment: 90,000

Increase in accounts receivable: 10,000

Depreciation expense: 30,000

Increase in accounts payable: 5,000

Receive cash from sale of land: 75,000

Pay cash dividends: 20,000

• 115,000

• 145,000

• 155,000

• 190,000

Using the information below, calculate net cash flows from investing activities:

Net income: 120,000

Receive cash from issuing stock : 80,000

Pay cash for equipment: 90,000

Increase in accounts receivable: 10,000

Depreciation expense: 30,000

Increase in accounts payable: 5,000

Receive cash from sale of land: 75,000

Pay cash dividends: 20,000

• -165,000

• 15,000

• 60,000

• -15,000

Using the information below, calculate net cash flows from financing activities:

Net income: 120,000

Receive cash from issuing stock : 80,000

Pay cash for equipment: 90,000

Increase in accounts receivable: 10,000

Depreciation expense: 30,000

Increase in accounts payable: 5,000

Receive cash from sale of land: 75,000

Pay cash dividends: 20,000

• 60,000

• -15,000

• 100,000

• 80,000

When treasury stock is purchased, what is the effect on total shareholders' equity?

• Decrease.

• Cannot be determined from the given information.

• Increase.

• No effect.

Suppose a company declares a dividend of $0.50 per share. At the time of declaration, the company has 100,000 shares issued and 90,000 shares outstanding. On the declaration date, Dividends would be recorded for

• $50,000.

• $45,000.

• $0.

• $95,000.

A company issues 100,000 shares of $1 par value common stock for $17 per share. To record this transaction, the company would credit Common Stock for:

• $1,700,000.

• $100,000.

• $1,600,000.

• $1,800,000.