1) Use the following information to calculate cash received from dividends:<\/p>\n\n\n\n
Dividends revenue<\/p>\n\n\n\n
$<\/p>\n\n\n\n
68,500<\/p>\n\n\n\n
Dividends receivable, January 1<\/p>\n\n\n\n
5,100<\/p>\n\n\n\n
Dividends receivable, December 31<\/p>\n\n\n\n
4,100<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$68,500.
$69,500.
$64,400.
$73,600.
$67,500.
2) A machine with a cost of $156,000, current year depreciation expense of $23,500 and accumulated depreciation of $98,000 is sold for $50,400 cash. The total amount related to this machine that should be reported in the operating section of the statement of cash flows under the indirect method is:<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$23,500.
$17,100.
$73,900.
$31,100.
$5,040.
3) The accountant for Crusoe Company is preparing the company’s statement of cash flows for the fiscal year just ended. The following information is available:<\/p>\n\n\n\n
Retained earnings balance at the beginning of the year<\/p>\n\n\n\n
$<\/p>\n\n\n\n
129,500<\/p>\n\n\n\n
Cash dividends declared for the year<\/p>\n\n\n\n
49,500<\/p>\n\n\n\n
Proceeds from the sale of equipment<\/p>\n\n\n\n
84,500<\/p>\n\n\n\n
Gain on the sale of equipment<\/p>\n\n\n\n
7,700<\/p>\n\n\n\n
Cash dividends payable at the beginning of the year<\/p>\n\n\n\n
21,500<\/p>\n\n\n\n
Cash dividends payable at the end of the year<\/p>\n\n\n\n
24,200<\/p>\n\n\n\n
Net income for the year<\/p>\n\n\n\n
95,500<\/p>\n\n\n\n
What is the ending balance for retained earnings?<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$283,000.
$205,500.
$181,000.
$255,000.
$175,500.
4) Use the following information about the current year’s operations of a company to calculate the cash paid for merchandise.<\/p>\n\n\n\n
Cost of goods sold<\/p>\n\n\n\n
$<\/p>\n\n\n\n
560,000<\/p>\n\n\n\n
Merchandise inventory, January 1<\/p>\n\n\n\n
91,000<\/p>\n\n\n\n
Merchandise inventory, December 31<\/p>\n\n\n\n
109,000<\/p>\n\n\n\n
Accounts payable, January 1<\/p>\n\n\n\n
80,000<\/p>\n\n\n\n
Accounts payable, December 31<\/p>\n\n\n\n
66,000<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$578,000.
$574,000.
$592,000.
$651,000.
$528,000.
5) Bagwell’s net income for the year ended December 31, Year 2 was $204,000. Information from Bagwell’s comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.
At December 31<\/p>\n\n\n\n
Year 2<\/p>\n\n\n\n
Year 1<\/p>\n\n\n\n
Common Stock, $5 par value<\/p>\n\n\n\n
$<\/p>\n\n\n\n
519,000<\/p>\n\n\n\n
$<\/p>\n\n\n\n
467,100<\/p>\n\n\n\n
Paid-in capital in excess of par<\/p>\n\n\n\n
967,000<\/p>\n\n\n\n
870,100<\/p>\n\n\n\n
Retained earnings<\/p>\n\n\n\n
707,000<\/p>\n\n\n\n
599,100<\/p>\n\n\n\n
Multiple Choice
$51,900.
$107,900.
$148,800.
$96,900.
$204,000.
6) Scranton, Inc. reports net income of $247,000 for the year ended December 31. It also reports $95,100 depreciation expense and a $5,850 gain on the sale of equipment. Its comparative balance sheet reveals a $38,900 decrease in accounts receivable, a $17,450 increase in accounts payable, and a $13,650 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$378,950.
$344,050.
$283,950.
$406,250.
$384,800.
7) A company’s income statement showed the following: net income, $147,000 and depreciation expense, $36,900. An examination of the company’s current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $11,700; merchandise inventory increased $22,600; and accounts payable increased $5,700. Calculate the net cash provided or used by operating activities.<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$178,700.
$189,100.
$141,000.
$212,500.
$143,900.
8) Fernwood Company is preparing the company’s statement of cash flows for the fiscal year just ended. The following information is available:<\/p>\n\n\n\n
Retained earnings balance at the beginning of the year<\/p>\n\n\n\n
$<\/p>\n\n\n\n
323,000<\/p>\n\n\n\n
Cash dividends declared for the year<\/p>\n\n\n\n
72,500<\/p>\n\n\n\n
Proceeds from the sale of equipment<\/p>\n\n\n\n
124,600<\/p>\n\n\n\n
Gain on the sale of equipment<\/p>\n\n\n\n
7,200<\/p>\n\n\n\n
Cash dividends payable at the beginning of the year<\/p>\n\n\n\n
31,900<\/p>\n\n\n\n
Cash dividends payable at the end of the year<\/p>\n\n\n\n
39,000<\/p>\n\n\n\n
Net income for the year<\/p>\n\n\n\n
159,500<\/p>\n\n\n\n
The amount of cash paid for dividends was:<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$88,600.
$87,000.
$70,900.
$65,400.
$72,500.
9) Bagwell’s net income for the year ended December 31, Year 2 was $196,000. Information from Bagwell’s comparative balance sheets is given below. Compute the cash paid for dividends during Year 2.<\/p>\n\n\n\n
At December 31<\/p>\n\n\n\n
Year 2<\/p>\n\n\n\n
Year 1<\/p>\n\n\n\n
Common Stock, $5 par value<\/p>\n\n\n\n
$<\/p>\n\n\n\n
511,000<\/p>\n\n\n\n
$<\/p>\n\n\n\n
459,900<\/p>\n\n\n\n
Paid-in capital in excess of par<\/p>\n\n\n\n
959,000<\/p>\n\n\n\n
862,900<\/p>\n\n\n\n
Retained earnings<\/p>\n\n\n\n
699,000<\/p>\n\n\n\n
591,900<\/p>\n\n\n\n
Multiple Choice<\/p>\n\n\n\n
$107,100.
$88,900.
$147,200.
$96,100.
$51,100.
10) In preparing a company’s statement of cash flows for the most recent year using the indirect method, the following information is available:
Net income for the year was<\/p>\n\n\n\n
$<\/p>\n\n\n\n
56,000<\/p>\n\n\n\n
Accounts payable increased by<\/p>\n\n\n\n
22,000<\/p>\n\n\n\n
Accounts receivable decreased by<\/p>\n\n\n\n
33,000<\/p>\n\n\n\n
Inventories decreased by<\/p>\n\n\n\n
9,000<\/p>\n\n\n\n
Cash dividends paid were<\/p>\n\n\n\n
18,000<\/p>\n\n\n\n
Depreciation expense was<\/p>\n\n\n\n
28,000<\/p>\n\n\n\n
Net cash provided by operating activities was:
Multiple Choice
$148,000.
$78,000.
$79,000.
$130,000.
$32,000.<\/p>\n\n\n\n
The correct answer and explanation is:<\/mark><\/strong><\/p>\n\n\n\n Here are the correct answers to the provided multiple-choice questions with detailed explanations:<\/p>\n\n\n\n 1) Cash Received from Dividends:<\/strong> Correct Answer: $69,500<\/strong><\/p>\n\n\n\n Explanation: To calculate the cash received from dividends, use the formula: Cash received from dividends=Dividends revenue+Dividends receivable (January 1)\u2212Dividends receivable (December 31)\\text{Cash received from dividends} = \\text{Dividends revenue} + \\text{Dividends receivable (January 1)} – \\text{Dividends receivable (December 31)} Using the given values: 68,500+5,100\u22124,100=69,50068,500 + 5,100 – 4,100 = 69,500<\/p>\n\n\n\n 2) Operating Section of the Statement of Cash Flows:<\/strong> Correct Answer: $31,100<\/strong><\/p>\n\n\n\n Explanation: For the sale of a machine, the cash flow in the operating section is affected by both the depreciation expense and the gain on sale: Depreciation Expense+Gain on Sale=23,500+(50,400\u2212(156,000\u221298,000))=31,100\\text{Depreciation Expense} + \\text{Gain on Sale} = 23,500 + (50,400 – (156,000 – 98,000)) = 31,100<\/p>\n\n\n\n 3) Ending Retained Earnings:<\/strong> Correct Answer: $181,000<\/strong><\/p>\n\n\n\n Explanation: The formula to calculate the ending retained earnings is: Ending Retained Earnings=Beginning Retained Earnings+Net Income\u2212Dividends Paid\\text{Ending Retained Earnings} = \\text{Beginning Retained Earnings} + \\text{Net Income} – \\text{Dividends Paid}<\/p>\n\n\n\n With adjustments for the changes in the dividends payable: 129,500+95,500\u221249,500=181,000129,500 + 95,500 – 49,500 = 181,000<\/p>\n\n\n\n 4) Cash Paid for Merchandise:<\/strong> Correct Answer: $574,000<\/strong><\/p>\n\n\n\n Explanation: To calculate the cash paid for merchandise: Cash paid for merchandise=Cost of Goods Sold+Change in Inventory+Change in Accounts Payable\\text{Cash paid for merchandise} = \\text{Cost of Goods Sold} + \\text{Change in Inventory} + \\text{Change in Accounts Payable} 560,000+(109,000\u221291,000)+(80,000\u221266,000)=574,000560,000 + (109,000 – 91,000) + (80,000 – 66,000) = 574,000<\/p>\n\n\n\n 5) Cash Received from Sale of Stock:<\/strong> Correct Answer: $107,900<\/strong><\/p>\n\n\n\n Explanation: The cash received from the sale of stock is the difference in the Common Stock and Paid-in Capital: (519,000\u2212467,100)+(967,000\u2212870,100)=107,900(519,000 – 467,100) + (967,000 – 870,100) = 107,900<\/p>\n\n\n\n 6) Cash Provided (Used) in Operating Activities:<\/strong> Correct Answer: $344,050<\/strong><\/p>\n\n\n\n Explanation: Cash provided from operating activities is calculated using the indirect method: Net Income+Depreciation+Changes in Working Capital=247,000+95,100+38,900+17,450\u221213,650=344,050\\text{Net Income} + \\text{Depreciation} + \\text{Changes in Working Capital} = 247,000 + 95,100 + 38,900 + 17,450 – 13,650 = 344,050<\/p>\n\n\n\n 7) Net Cash from Operating Activities:<\/strong> Correct Answer: $189,100<\/strong><\/p>\n\n\n\n Explanation: To calculate the cash provided by operating activities: 147,000+36,900+11,700+(\u221222,600)+5,700=189,100147,000 + 36,900 + 11,700 + (-22,600) + 5,700 = 189,100<\/p>\n\n\n\n 8) Cash Paid for Dividends:<\/strong> Correct Answer: $88,600<\/strong><\/p>\n\n\n\n Explanation: The cash paid for dividends is calculated as: Cash dividends declared+Change in dividends payable=72,500+(39,000\u221231,900)=88,600\\text{Cash dividends declared} + \\text{Change in dividends payable} = 72,500 + (39,000 – 31,900) = 88,600<\/p>\n\n\n\n 9) Cash Paid for Dividends (Bagwell):<\/strong> Correct Answer: $96,100<\/strong><\/p>\n\n\n\n Explanation: The formula for cash paid for dividends is: Cash dividends declared\u2212Change in retained earnings=96,100\\text{Cash dividends declared} – \\text{Change in retained earnings} = 96,100<\/p>\n\n\n\n 10) Net Cash Provided by Operating Activities:<\/strong> Correct Answer: $130,000<\/strong><\/p>\n\n\n\n Explanation: The net cash provided by operating activities is calculated as: 56,000+22,000+33,000+9,000+28,000\u221218,000=130,00056,000 + 22,000 + 33,000 + 9,000 + 28,000 – 18,000 = 130,000<\/p>\n\n\n\n Each answer is determined by adjusting for relevant transactions such as changes in working capital, depreciation, and gains or losses.<\/p>\n","protected":false},"excerpt":{"rendered":" 1) Use the following information to calculate cash received from dividends: Dividends revenue $ 68,500 Dividends receivable, January 1 5,100 Dividends receivable, December 31 4,100 Multiple Choice $68,500.$69,500.$64,400.$73,600.$67,500.2) A machine with a cost of $156,000, current year depreciation expense of $23,500 and accumulated depreciation of $98,000 is sold for $50,400 cash. The total amount related […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-182816","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/182816","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=182816"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/182816\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=182816"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=182816"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=182816"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}