41) Beyond the Boardroom Corporation sold used equipment with a book value of $25,000 for $29,000. The indirect method cash flow statement will reflect:
A) an addition of $29,000 in the investing activities section and an addition of $4,000 in the operating activities section
B) an addition of $25,000 in the investing activities section and an addition of $4,000 in the operating activities section
C) an addition of $29,000 in the investing activities section and a deduction of $4,000 in the operating activities section
D) an addition of $25,000 in the investing activities section and a deduction of $4,000 in the operating activities section
42) Using the indirect method of preparing a cash flow statement, amortization expense for the current year is:
A) added in the operating activities section
B) added in the investing activities section
C) added in the financing activities section
D) subtracted in the operating activities section
43) No Harm Corporation sold some of its used equipment with a book value of $52,000 for $47,000. The indirect method cash flow statement will reflect an addition in the investing activities section of:
A) $47,000 and a deduction of $5,000 in the operating activities section
B) $47,000 and an addition of $5,000 in the operating activities section
C) $52,000 and an addition of $5,000 in the operating activities section
D) $52,000 and a deduction of $5,000 in the operating activities section
44) On an indirect method cash flow statement, dividends paid during the year are:
A) added to net income
B) deducted from net income
C) reflected in the financing activities section
D) reflected in the investing activities section
45) On an indirect method cash flow statement, an increase in accounts payable would be:
A) reflected in the investing activities section
B) netted against any decreases in accounts receivable
C) added to net income
D) deducted from net income
46) On an indirect method cash flow statement, a decrease in inventory would be:
A) netted against any decreases in accounts payable
B) deducted from net income
C) reflected in the investing activities section
D) added to net income
47) Under the indirect method of preparing a cash flow statement, a decrease in the balance in the Accounts Receivable account during the year is:
A) added in the operating activities section
B) added in the investing activities section
C) subtracted in the operating activities section
D) subtracted in the financing activities section
48) Which of the following would appear on a direct method cash flow statement?
A) Amortization Expense
B) loss on sale of assets
C) increase in Accounts Receivable
D) cash payments for inventory
49) Fertilizer Incorporated reports an increase in Accounts Payable of $9,200 and an increase in inventory of $45,000 for the current year. Accounts Payable relates solely to the purchase of merchandise. Sales on account were $532,100 and cost of goods sold was $358,000. The total purchases of merchandise for the period were:
A) $174,100
B) $313,000
C) $358,000
D) $403,000
50) During 2010, Toxic Release LLC paid a total of $64,000 in cash for insurance. Toxic Release's Prepaid Insurance account had a balance on January 1, 2010, of $8,000 and a balance on December 31, 2010, of $5,500. The amount of Insurance Expense to be reported on Toxic Release's income statement for the year ended December 31, 2010, is:
A) $58,500
B) $66,500
C) $64,000
D) $61,500