Multiple-Choice Questions Use the following information to answer questions 13. Quality Products engaged in the following cash

Multiple-Choice Questions

Use the following information to answer questions 1–3.

Quality Products engaged in the following cash transactions during May:

Purchase of inventory...........$ 5,000

Cash proceeds from loan$ 7,000

Cash paid for interest$ 400

Cash collected from sales$26,500

New stock issued$25,000

Salaries paid to employees$ 4,600

Purchase of new delivery van$20,000

1. How much is net cash from financing activities?

a. $ 7,000

b. $25,000

c. $31,600

d. $32,000

2. How much is net cash from investing activities?

a. $(20,000)

b. $(25,000)

c. $ 25,000

d. $ 32,000

3. How much is net cash from operating activities?

a. $26,500

b. $ (3,500)

c. $16,500

d. $16,900

4. Cash from the sale of treasury stock

a. Would not be included in the statement of cash flows.

b. Would be classified as a contra-equity cash flow.

c. Would be classified as an investing cash flow.

d. Would be classified as a financing cash flow.

5. The cash proceeds from the sale of a building will be

a. The cost of the building.

b. The book value of the building.

c. The book value plus any gain or minus any loss.

d. Shown on the financing portion of the appropriate financial statement.

6. If a firm has net investing cash inflows of $5,000; net financing cash inflows of $24,000; and a net increase in cash for the year of $12,000, how much is net cash from operating activities?

a. Net cash inflow of $17,000

b. Net cash inflow of $29,000

c. Net cash outflow of $17,000

d. Net cash outflow of $19,000

7. Depreciation for the year was $50,000 and net income was $139,500. If the company’s transactions were all cash except those related to long-term assets, how much was net cash from operating activities?

a. $139,500

b. $189,500

c. $ 89,500

d. It cannot be determined from the given information.

Use the following information to answer questions 8–10.

The income statement and additional data for Frances Company for the year ended December 31, 2011, follow:

Accounts receivable decreased by $12,000. Inventories increased by $6,000 and accounts payable decreased by $2,000. Salaries payable increased by $8,000. Prepaid insurance increased by $4,000. Interest expense and income tax expense equal their cash amounts. Frances Company uses the direct method for its statement of cash flows.
8. How much cash did Frances Company collect from customers during 2011?
a. $400,000
b. $412,000
c. $406,000
d. $388,000
9. How much cash did Frances Company pay its vendors during 2011?
a. $173,000
b. $165,000
c. $167,000
d. $163,000
10. How much cash did Frances Company pay for insurance during the year?
a. $20,000
b. $24,000
c. $16,000
d.$48,000

Transcribed Image Text:

Frances Company Income Statement For the Year Ended December 31, 2011 Sales revenue Expenses: Cost of goods sold .. Salary expense Depreciation expense Insurance expense . Interest expense. Income tax expense Net income $400,000 . $165,000 ...70,000 55,000 20,000 10,000 18,000 338,000 .62,000