16 7 questions 1 indiana company has the following data available decemberdecember 3 4307854

16 7 questions 1 indiana company has the following data available decemberdecember 3 4307854

16.7   Questions

1) Indiana Company has the following data available:

DecemberDecember

31, 2011                  31, 2012

Fixed Assets$125$125

Accumulated Depreciation$110$117

Long-term debt$125$5

Common stock$300$400

Retained earnings$100$120

No dividends were declared or paid for the year ending December 31, 2012.

What is the net cash flow from financing activities for the year ended December 31, 2012?

A) $20 cash inflow

B) $20 cash outflow

C) $100 cash inflow

D) $120 cash outflow

2) Indian Company has the following data available:

DecemberDecember

31, 2011                  31, 2012

Fixed Assets$125$125

Accumulated Depreciation$110$117

Long-term debt$125$5

Common stock$300$400

Retained earnings$100$120

Dividends of $10 were declared on December 1, 2012.  What is the net income for the year ended December 31, 2012?

A) $10

B) $20

C) $30

D) $40

3) Beginning retained earnings was $34,000.  Ending retained earnings was $61,600 and net income was $36,000.  What amount of dividends was declared?

A) $1,200

B) $8,400

C) $30,000

D) $36,000

4) Jackson Company reported selected accounts as follows:

December 31, 2010          December 31, 2011

Accounts payable$20,000$30,000

Bonds payable$40,000$28,000

Common stock$20,000$24,000

Dividends of $8,800 were declared for the year ended December 31, 2011.  What was the net cash flow from financing activities for the year ended December 31, 2011?

A) $6,800 cash outflow

B) $16,800 cash outflow

C) $6,800 cash inflow

D) $16,800 cash inflow

5) Old equipment having a book value of $12,000 was sold for $10,000 cash.  New equipment was purchased for $25,000 cash.  Additional equipment was acquired in exchange for a $17,000 long-term note payable.  The net cash flow from investing activities was ________.

A) $13,000 cash outflow

B) $15,000 cash outflow

C) $30,000 cash outflow

D) $32,000 cash outflow

6) Yesterday Company reports the following information:

12/31/11                 12/31/12

Fixed Assets$330$581

Accumulated Depreciation110127

Net Fixed Assets$220$454

Depreciation expense for the year ending December 31, 2012 is $17.  No fixed assets were sold during 2012.  What is the net cash flow from investing activities for the year ending December 31, 2012?

A) $17 cash inflow

B) $251 cash inflow

C) $251 cash outflow

D) None of the above

7) Today Corporation reports the following data:

12/31/11                 12/31/12

Fixed Assets$330$581

Accumulated Depreciation110127

Net Fixed Assets$220$454

Depreciation expense for the year ending December 31, 2012 is $27.  The company sold a fixed asset for $10 cash on December 1, 2012.  The cost of the fixed asset sold was $20 and the accumulated depreciation on the fixed asset sold was $10.  What is the net cash flow from investing activities for the year ending December 31, 2012?

A) $241 cash outflow

B) $251 cash outflow

C) $261 cash outflow

D) $271 cash outflow

8) Hollander Company gave a long-term note payable in the amount of $285,000 to acquire a new piece of equipment.  This transaction will be reported on the statement of cash flows as a ________.

A) investing activity

B) financing activity

C) investing and financing activity

D) noncash transaction

9) An example of a financing activity on the statement of cash flows is the conversion of debt to common stock.

10) An example of an investing activity on the statement of cash flows is the purchase of equipment for cash.

11) Fabulous Company had the following information for the year ended December 31, 2015 and December 31, 2016.

December 31, 2016          December 31, 2015

Fixed assets$186,000$156,000

Accumulated depreciation62,00054,000

Depreciation expense for the year ended December 31, 2016 was $18,000.  Equipment that cost $20,000 was sold at a $3,000 loss.  The equipment had accumulated depreciation of $10,000.

Required:

Prepare the investing section of the statement of cash flows for the year ended December 31, 2016.  Use the direct method.

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