chapter 13 connect video MA

The following events occurred last year at Nieto Company: Depreciation expense$12,000 Dividends paid$10,000 Paid off bonds payable$23,500 Purchase of plant and equipment$39,000 Sale of long-term investment$18,000 What is the net cash provided by (used in) investing activities?

$(21,000)

The following events occurred last year at Nieto Company: Depreciation expense$22,000 Dividends paid$11,200 Paid off bonds payable$45,000 Purchase of plant and equipment$60,000 Sale of long-term investment$40,500 Based on the above information, what is the net cash provided by (used in) financing activities?

$(56,200)

Duffy Inc., had net income of $95,000 for the year just ended. Duffy collected the following additional information to prepare its statement of cash flows for the year. Accounts Receivable increased by $191,000, Inventory decreased by $32,000, Accounts Payable decreased by $49,000, and Depreciation charges amounted to $46,000. Duffy uses the indirect method to prepare its statement of cash flows. What is Duffy's net cash provided by (used in) operating activities?

$(67,000)

Assume the Accumulated Depreciation account had beginning and ending balances of $600 and $1,000, respectively. Also, assume that the company sold equipment with accumulated depreciation of $100 during the period. What was the amount of depreciation charges during the period?

500

Luddington, Inc., reported a $100,000 loss on the sale of equipment on its income statement. Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

Add back $100,000 to net income.

Freemont Company's Accounts Payable decreased by $4,000 and its Income Taxes Payable increased by $3,000 during the year. Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

The change in Accounts Payable is subtracted from net income; the change in Income Taxes Payableis added to net income.

Freemont Company's Accounts Receivable decreased by $4,000 and its Inventory decreased by $3,000 during the year. Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

The change in Accounts Receivable is added to net income; the change in Inventoryis added to net income.

When the indirect method is used to adjust net income to net cash provided by operating activities, the first step is to _______.

add depreciation charges to net income

The income statement is reconstructed on a cash basis from top to bottom when the ________ method is used to prepare the operating activities section of the statement of cash flows.

direct method

Most companies use the indirect method to prepare the statement of cash flows for external reporting purposes because the ________

direct requires more work

These activities generate cash inflows and outflows related to creditors and transactions with the companies owners

financing activities

these activities generate cash inflows and outflows related to acquiring or disposing of concurrent assets, long term investments, and loans to another entity

investing activities

Start-up companies often have negative net cash provided by ________.

operating activities

These activities generate cash inflows and outflows related to revenue and expense transactions that affect net income

operating activities