21) On a statement of cash flows prepared using the indirect method, an increase in Accounts Payable during the period is:
A) added to net income to determine net cash provided by operating activities.
B) deducted from net income to determine net cash provided by operating activities.
C) shown as a cash inflow in the investing activities section.
D) shown as a cash inflow in the financing activities section.
22) When converting net income to net cash provided by operating activities on the statement of cash flows, indirect method, which of the following is NOT added to net income?
A) Gain on sale of land
B) Decrease in inventory
C) Decrease in accounts receivable
D) Depreciation expense
23) Salem, Inc. uses the indirect method to prepare its statement of cash flows. Salem's Accumulated Depreciation—Trucks account increased during the period. Salem did not purchase or sell trucks during the period. The increase in Accumulated Depreciation—Trucks is:
A) subtracted from net income to determine net cash provided by operating activities.
B) added to net income to determine net cash provided by operating activities.
C) shown as a cash outflow on the investing activities section.
D) shown as a cash outflow on the financing activities section.
24) If $400,000 of bonds are issued during the year, but $100,000 of old bonds are retired during the year, the statement of cash flows(indirect method) will show a(n):
A) net gain on retirement of bonds of $300,000 in the financing activities section.
B) increase in cash of $400,000 in the financing activities section and a decrease in cash of $100,000 in the financing activities section.
C) net increase in cash of $300,000 in the operating activities section.
D) net decrease in cash of $300,000 in the operating activities section.
25) On a statement of cash flows, activities that affect long-term assets are classified as:
A) operating activities.
B) investing activities.
C) financing activities.
D) stockholders' equity activities.
26) Mary Magdalene, Inc. had the following transactions:
Cash proceeds on sale of land
|
$400,000
|
Cash proceeds on sale of equipment
|
150,000
|
Purchase of treasury stock
|
50,000
|
Purchase of equipment with cash
|
50,000
|
Issuance of common stock
|
100,000
|
On a statement of cash flows prepared under the indirect method, Net Cash Provided by Investing Activities is:
A) $350,000.
B) $450,000.
C) $500,000.
D) $550,000.
27) On the statement of cash flows prepared under the indirect method, activities that affect stockholders' equity and long-term debt are classified as:
A) operating activities.
B) investing activities.
C) financing activities.
D) free cash flows.
28) Land was purchased by issuing common stock. This transaction would be reported on the statement of cash flows as a(n):
A) operating activity.
B) investing activity.
C) financing activity.
D) noncash investing and financing activity.
29) On the statement of cash flows, cash payments from financing activities include:
A) issuing stock for property.
B) sale of treasury stock.
C) payment of notes payable.
D) purchase of plant assets.
30) During the year, Lady Liberty Corporation's treasury stock increased $50,000 from a cash purchase, cash dividends paid totaled $44,000 and the company reported net income of $200,000. On the statement of cash flows(indirect method), Net Cash Used by Financing Activities is:
A) ($94,000).
B) ($106,000).
C) ($150,000).
D) ($156,000).