ACCT Quiz 6

Depreciation expense is deducted from net income in determining cash flows provided by operating activities under the indirect method.

False

The operating activities section of the statement of cash flows shows a reconciliation of net income to the net cash provided by operating activities amount under the direct method.

False

A company had net income of $1,860,000 in 2016. Depreciation expense is $208,000. During the year, Accounts Receivable and Inventory increased $120,000 and $320,000, respectively. Prepaid Expenses and Accounts Payable decreased $16,000 and $32,000, respectively. There was also a loss on the sale of equipment of $24,000. How much cash was provided by operating activities in 2016

$1,636,000

Financing activities involve

issuing debt

Lumos, Inc. has an accrual basis net loss of $80,000 in 2016 and the following related items: Depreciation expense $44,000 Accounts receivable decrease 32,000 Inventory increase 24,000 Accounts payable increase 12,000 Income tax payable increase 20,000 How much is Lumos' net cash flow from operating activities in 2016?

$4,000

Consider the following: Net income, $380,000 Depreciation Expense $44,000 Increase in accounts receivable, $16,000 Decrease in merchandise inventory, $80,000 Decrease in accounts payable, $32,000 Increase in income taxes payable, $12,000 Using the Indirect Method, the Net Cash provided by Operating Activities was

$468,000

A company had net income of $930,000 in 2016. Depreciation expense is $104,000. During the year, Accounts Receivable and Inventory increased $60,000 and $160,000, respectively. Prepaid Expenses and Accounts Payable decreased $8,000 and $16,000, respectively. There was also a loss on the sale of equipment of $12,000. How much cash was provided by operating activities in 2016?

$818,000

Wang Company's financial statements show a net income of $756,000 in 2016. The following items also appear on Wang's balance sheet: Depreciation expense $160,000 Accounts receivable decrease 48,000 Inventory increase 112,000 Accounts payable increase 32,000 Using the indirect method, what is Wang's net cash flow from operating activities in 2016?

A) $ 884,000

The acquisition of land by issuing common stock is

A) a noncash transaction that is not reported in the body of a statement of cash flows

What is a possible source of cash inflow for an operating activity

Sale of goods or services