51. The 2016 income statement of Phillips Co. reported total sales revenue of $460,000; the 2015 balance sheet showed a balance in accounts receivable of $70,000 while the 2016 balance sheet showed a balance in accounts receivable of $100,000. The amount of cash collected from customers was:
A. $530,000.
B. $460,000.
C. $490,000.
D. $430,000.
52. Ervin Company began the accounting period with $64,000 in accounts receivable. The ending balance in accounts receivable was $40,000. If the credit sales during the period were $588,000, what is the amount of cash received from customers?
A. $564,000
B. $612,000
C. $24,000
D. $548,000
53. Which of the following transactions is a use of cash?
A. Short-term borrowing of cash.
B. Acquisition of land by issuing a short-term note payable.
C. Issuance of a stock dividend.
D. Purchase of treasury stock.
54. The amount of cash revenue received from customers during 2016 was:
A. $296,000.
B. $264,000.
C. $280,000.
D. $248,000.
55. Assuming accounts payable is used for inventory purchases only, the amount of cash paid for inventory purchases during 2016 was:
A. $32,000.
B. $176,000.
C. $192,000.
D. $160,000.
56. The following beginning and ending balances were drawn from the records of Allen Co.
57. When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of a loss on disposal of equipment?
A. Disregard the loss because it relates to an investing activity.
B. Disregard the loss because it relates to a financing activity.
C. Add the loss to net income.
D. Subtract the loss from net income.
58. When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows, what is the proper disposition of depreciation expense?
A. Subtract depreciation from net income.
B. Add depreciation to net income.
C. Disregard depreciation because it relates to an investing activity.
D. Disregard depreciation because it is a noncash expense.
59. Which method of reporting cash flows from operating activities is used by most businesses in preparing the statement of cash flows?
A. Accrual method
B. Direct method
C. Indirect method
D. Computational method
60. When using the indirect method to prepare the statement of cash flows, an increase in noncash current assets is
A. subtracted from net income in the cash flows from operating activities section.
B. subtracted from current liabilities in the cash flows from financing activities section.
C. added to net income in the cash flows from operating activities section.
D. added to equipment purchases in the cash flows from investing activities section.