Int. Acct. Ch. 4 Pt. 3

Sales on account are $100,000. Beginning accounts receivable is $20,000, and ending accounts receivable is $15,000. What is the cash collected from customers during the period?

$105,000 Reason: $100,000 + 20,000 - 15,000 = $105,000

Tax expense is $100,000 for the period. The beginning balance in taxes payable is $20,000, and the ending balance is $14,000. What is the amount of taxes paid during the period?

$106,000 Reason: $20,000 - 14,000 + 100,000 = $106,000

Roger Corporation reports accumulated other comprehensive income of $10 million at 12/31/16. For the year ended 12/31/17, the company reports net income of $12 million and total comprehensive income of $15 million. On 12/31/17, Roger Corporation should report accumulated other comprehensive income of:

$13 million Reason: beginning AOCI + OCI for 2017 ($10 mill. + ($15 - 12 mill).d

Sales on account are $200,000. Cash sales during the period are $50,000. Beginning accounts receivable is $20,000, and ending accounts receivable is $30,000. What is the total cash collected from customers during the period?

$240,000 Reason: Beginning A/R + sales on account - Ending A/R = credit sales collected. $20,000 + $200,000 - $30,000 = $190,000 of the sales on account were collected in cash during the period + the $50,000 cash sales.

olter Corp. has the following information: Sale of land $10,000 Purchase of inventory 20,000 Purchase of building 100,000 Collection from customers 50,000 Sale of available-for-sale securities 30,000 What is the net cash flow from investing activities?

($60,000)

Which of the following are significant noncash activities? (Select all that apply.)

-Acquiring land by issuing common stock. -Acquiring equipment by issuing a long-term note.

Which of the following are acceptable methods for reporting comprehensive income? (Select all that apply.)

-In one single statement of comprehensive income -in two consecutive statements - income statement and comprehensive income statement

The indirect method of statement of cash flow preparation (Select all that apply.)

-adjusts for changes in assets to reconcile the difference between accrual net income and cash paid or received. -adjusts for changes in liabilities to reconcile the difference between accrual net income and cash paid or received. -adds back depreciation expense because it affects net income but does not reduce cash.

Which of the following items are classified as cash inflows from operating activities on the statement of cash flows? (Select all that apply.)

-collection on account -interest received on notes receivable

The two types of adjustments to net income for the indirect method are adjustments for

-components of net income that do not affect cash. -changes in operating assets and liabilities during the period that affected cash and were not in net income.

In preparing the operating activities section of a statement of cash flows using the indirect method, net income should be adjusted for (Select all that apply.)

-depreciation expense. -gain from sale of asset. -loss from sale of asset.

The statement of cash flows is useful because (select all that apply)

-it reveals the company's ability to generate positive cash flow from its normal operations -it provides information about liquidity

In order to provide more complete information, U.S. GAAP allows that any significant noncash investing and financing activities may be reported (Select all that apply.)

-on the face of the statement of cash flows. -in the notes to financial statements.

Which of the following are cash outflows from investing activities? (Select all that apply)

-purchase of long-term investments -Purchase of building -purchase of land

The direct method and indirect method of preparing the statement of cash flows result in (Select all that apply.)

-the same presentation of investing and financing activities. -the same net cash flows from operating activities.

Cryon Corp. has the following information: Borrow from bank $100,000 Pay dividend 30,000 Purchase building 50,000 Collect from customers 50,000 Repay loan from bank 30,000 What is the net cash flow from financing activities?

40,000

anier Corp. has the following information: Sale of building $100,000 Sales on account 40,000 Purchase of land 30,000 Collection from customers 50,000 Issue of stock 30,000 What is the net cash flow from investing activities?

70,000

When net income and comprehensive income are identical for all years presented in a company's income statement, which of the following is true?

A statement of comprehensive income is not required.

The ending balance of accumulated other comprehensive income is calculated by adding this amount to the beginning balance of accumulated other comprehensive income.

Current year other comprehensive income

Revaluation surplus is reported as other comprehensive income under

IFRS

Which is a significant noncash activity?

Signing a note payable in exchange for land.

Under which of the following conditions is a statement of comprehensive income not required?

When a company has no other comprehensive income items for all years presented.

The statement of cash flows is useful because

accrual-based income is not an indication of cash flows.

Accumulated other comprehensive income (AOCI) is found on what financial statement?

balance sheeet

Which of the following are cash inflows from financing activities? (Select all that apply.)

borrowing from bank, issuance of common stock to investors

Which accounting standard(s) allow companies to choose between the one and the two statement approach for reporting comprehensive income?

both

The direct method for preparing the statement of cash flows reports

cash received and cash paid from operating activities.

The operating activities section on the statement of cash flows includes the elements of net income on a(n) --- basis rather than --- basis

cash, accrual

The FASB's expanded view of income is included in ---- income

comprehensive

U.S. GAAP requires that a statement of cash flows must be presented for

each period for which a balance sheet and income statement are prepared.

Comprehensive income is defined as the total change in ______ for a reporting period other than transactions with owners.

equity

Margot Company prepares its financial statements consistent with IFRS. The company chose the revaluation method for valuing its equipment. The company will report revaluation surplus if the equipment's

fair value exceeds its book value

According to IFRS, interest and dividends paid can be classified as a(n) (Select all that apply.)

financing, operating

Comprehensive income includes net income as well as other --- and --- that change shareholders' equity but are not included in traditional net income. (Enter one word per blank.)

gains, losses

the --- method of preparing the statement of cash flows begins with net income. (Enter only one word.)

indirect

For financing activities, a cash ______ occurs when cash is borrowed from a creditor; a cash ______ occurs when owners receive a dividend.

inflow; outflow

Differences arise between U.S. GAAP and IFRS on the statement of cash flows due to different classifications of --- and ---

interest, dividends

Which of the following are used in the computation of comprehensive income?

net income

The calculation of- ---income omits certain gains and losses that are instead included in the broader perspective of other --- income

net, comprehensive

Under IFRS, if the revaluation option is chosen, the excess of the fair value of property, plant and equipment over its book value is reported as --- --- ---

other comprehensive income

A decrease in accounts payable represents a cash ______ from operating activities; a decrease in accounts receivable represents a cash _____ from operating activities.

outflow, inflow

For financing activities, a cash ______ occurs when a company purchases its own securities as treasury stock; a cash ______ occurs when a company issues stock for cash to investors.

outflow; inflow

The purchase of a long-term investment is a cash ______ from investing activities; sale of a long-term investment is a cash ______ from investing activities.

outflow; inflow

Significant noncash investing and financing activities are disclosed because they

provide more complete information.

Accumulated other comprehensive income represents

the total of other comprehensive income to date.