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Anita L. Eisthen, CFA, CPA, MBA
Anita L. Eisthen, CFA, CPA, MBA, Financial Advisor
Category: Finance
Satisfied Customers: 84
Experience:  Investment Advisor for over 25 years. Former Big 8 Public Accounting Firm Auditor.
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The net income reported on the income statement for the current

Customer Question

The net income reported on the income statement for the current year was $840,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $8,000 and $32,000, respectively. Prepaid expenses and accounts payable decreased by $4,000 and $44,000, respectively. How much cash was provided by operating activities?
Answer
$760,000.
$840,000.
$798,000.
$984,000.

2.5 points
Question 6
Question 6

Which of the following is the first step in preparing the statement of cash flows?
Answer
Determine the net cash provided by operating activities.
Determine the net income.
Determine net cash provided by investing and financing activities.
Determine the net increase (decrease) in cash.

2.5 points
Question 7
Question 7

During 2010, Bale Company sold equipment with a book value of $90,000 for proceeds of $104,000. The company purchased new equipment for $240,000 by signing a long-term note payable. No other transactions impacted long-term asset accounts during 2010. The investing section of the statement of cash flows will report
Answer
net cash outflows of $226,000.
net cash outflows of $136,000.
net cash inflows of $104,000.
net cash inflows of $14,000.

2.5 points
Question 8
Question 8

When using the indirect method to compute cash provided by operating activities
Answer
income taxes paid may be ignored.
amortization expense is added to net income.
decreases in inventory are subtracted from net income.
increases in accounts receivable are added to net income.

2.5 points
Question 9
Question 9

The statement of cash flows will not report the
Answer
amount of checks outstanding at the end of the period.
sources of cash in the current period.
uses of cash in the current period.
change in the cash balance for the current perio
Submitted: 4 years ago.
Category: Finance
Expert:  Anita L. Eisthen, CFA, CPA, MBA replied 4 years ago.

The net income reported on the income statement for the current year was $840,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $8,000 and $32,000, respectively. Prepaid expenses and accounts payable decreased by $4,000 and $44,000, respectively. How much cash was provided by operating activities? Answer $798,000.

 

Question 6 Question 6 Which of the following is the first step in preparing the statement of cash flows? Answer Determine the net income.

 

Note on this: arguably the net income would already be known from the income statement preparation. Determining cash from operating activities would only apply if you are using the indirect method, although the tester might believe that this is the correct answer.

 

Question 7 Question 7 During 2010, Bale Company sold equipment with a book value of $90,000 for proceeds of $104,000. The company purchased new equipment for $240,000 by signing a long-term note payable. No other transactions impacted long-term asset accounts during 2010. The investing section of the statement of cash flows will report Answer net cash outflows of $136,000

 

Question 8 Question 8 When using the indirect method to compute cash provided by operating activities Answer increases in accounts receivable are added to net income. 2.5 points

 

Question 9 Question 9 The statement of cash flows will not report the Answer amount of checks outstanding at the end of the period.

Anita L. Eisthen, CFA, CPA, MBA, Financial Advisor
Category: Finance
Satisfied Customers: 84
Experience: Investment Advisor for over 25 years. Former Big 8 Public Accounting Firm Auditor.
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