Accounting Exam 2 CH 11 PRACTICE PROBLEMS Flashcards

Question 1

It reconciles the ending cash account balance to the balance per the bank statement
Which of the following is incorrect about the statement of cash flows?
1. How much cash did Violet Inc. use to purchase equipment during 2022?
1. Which of the following is an example of a cash flow from an operating activity?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?

Accepted Answer

Which of the following is incorrect about the statement of cash flows?

Question 2

Payment of cash for interest on note payable.
1. How much cash did Violet Inc. use to purchase equipment during 2022?
1. Which of the following is an example of a cash flow from an operating activity?
Router, Inc. had the following results for December 31, 2023 and 2022, respectively:
 2023. 2022
Cash $50,000 $40,000
Non-cash current assets 
 $190,000 $160,000
Cash inflow from financing activities 
 $210,000
Cash inflow from operating activities 
 $90,000
What was the amount of cash flows from investing activities?
Which of the following is an example of a cash flow from a financing activity?

Accepted Answer

1. Which of the following is an example of a cash flow from an operating activity?

Question 3

Receipt of cash from the sale of operating assets.
Router, Inc. had the following results for December 31, 2023 and 2022, respectively:
 2023. 2022
Cash $50,000 $40,000
Non-cash current assets 
 $190,000 $160,000
Cash inflow from financing activities 
 $210,000
Cash inflow from operating activities 
 $90,000
What was the amount of cash flows from investing activities?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?
Which of the following is an example of a cash flow from an investing activity?

Accepted Answer

Which of the following is an example of a cash flow from an investing activity?

Question 4

Receipt of cash from the issuance of bonds.
1. How much cash did Violet Inc. use to purchase equipment during 2022?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?
Which of the following is an example of a cash flow from a financing activity?

Accepted Answer

Which of the following is an example of a cash flow from a financing activity?

Question 5

Cash outflow of $290,000

Explanation: 
Cash flow from operating + cash flow from financing + cash flow from investing = change in cash
$90,000 + $210,000 + cashflow from investing = $10,000
Cash flow from investing = cash outflow of $290,000
Which of the following is an example of a cash flow from an investing activity?
Router, Inc. had the following results for December 31, 2023 and 2022, respectively:
 2023. 2022
Cash $50,000 $40,000
Non-cash current assets 
 $190,000 $160,000
Cash inflow from financing activities 
 $210,000
Cash inflow from operating activities 
 $90,000
What was the amount of cash flows from investing activities?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?
1. The following select information was taken from Bradley Company's financial records:--> 
If the indirect method is used to prepare the operating section of the statement of cash flows, what amount will be reported as cash from operating activities?

Accepted Answer

Router, Inc. had the following results for December 31, 2023 and 2022, respectively:
 2023. 2022
Cash $50,000 $40,000
Non-cash current assets 
 $190,000 $160,000
Cash inflow from financing activities 
 $210,000
Cash inflow from operating activities 
 $90,000
What was the amount of cash flows from investing activities?

Question 6

$15,000.

Explanation: 
Dividends declared:
Beginning RE + Net income - Dividends declared = Ending RE
$250,000 + $150,000 - Dividends declared = $375,000
Dividends declared = $25,000

Cash paid:
Beg. dividends payable + dividends declared - dividends paid = End dividends payable
$10,000 + $25,000 - dividends paid = $20,000
Cash paid for dividends = $15,000
Which of the following is an example of a cash flow from a financing activity?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?
Which of the following is an example of a cash flow from an investing activity?
The following information relates to equipment for Violet Inc.:
 2022 2021
Equipment $227,000 $182,000
Accumulated depreciation 
 $52,000. $48,000
During 2022, equipment costing $30,000 with accumulated depreciation of $18,000 was sold for $15,200. Assume all purchases and sales of equipment were for cash.
1. How much depreciation expense was recorded by Violet Inc. for 2022?

Accepted Answer

1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?

Question 7

$22,000

Explanation: 
Beg. accum dep + depreciation expense - accum dep on asset sold = End accum dep
$48,000 + depreciation expense - $18,000 = $52,000
Depreciation expense = $22,000
1. How much cash did Violet Inc. use to purchase equipment during 2022?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?
Which of the following is incorrect about the statement of cash flows?
The following information relates to equipment for Violet Inc.:
 2022 2021
Equipment $227,000 $182,000
Accumulated depreciation 
 $52,000. $48,000
During 2022, equipment costing $30,000 with accumulated depreciation of $18,000 was sold for $15,200. Assume all purchases and sales of equipment were for cash.
1. How much depreciation expense was recorded by Violet Inc. for 2022?

Accepted Answer

The following information relates to equipment for Violet Inc.:
 2022 2021
Equipment $227,000 $182,000
Accumulated depreciation 
 $52,000. $48,000
During 2022, equipment costing $30,000 with accumulated depreciation of $18,000 was sold for $15,200. Assume all purchases and sales of equipment were for cash.
1. How much depreciation expense was recorded by Violet Inc. for 2022?

Question 8

a. $75,000

Explanation: 
Beginning Equipment + Equipment purchases - Equipment sold = Ending Equipment
$182,000 + Equipment purchases - $30,000 = $227,000
Equipment purchases = $75,000
The following information relates to equipment for Violet Inc.:
 2022 2021
Equipment $227,000 $182,000
Accumulated depreciation 
 $52,000. $48,000
During 2022, equipment costing $30,000 with accumulated depreciation of $18,000 was sold for $15,200. Assume all purchases and sales of equipment were for cash.
1. How much depreciation expense was recorded by Violet Inc. for 2022?
1. Which of the following is an example of a cash flow from an operating activity?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?
1. How much cash did Violet Inc. use to purchase equipment during 2022?

Accepted Answer

1. How much cash did Violet Inc. use to purchase equipment during 2022?

Question 9

$10,000

Explanation: 
Journal entry for sale:
DR Cash ?
DR Accum Dep $30,000
DR Loss on sale $10,000
CR Equip $50,000

Cash/proceeds = $10,000
Which of the following is incorrect about the statement of cash flows?
1. The following select information was taken from Bradley Company's financial records:--> 
If the indirect method is used to prepare the operating section of the statement of cash flows, what amount will be reported as cash from operating activities?
1. Information from the financial records of Mummy Corporation is presented below:
How much cash was paid for dividends in 2023?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?

Accepted Answer

1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?

Question 10

$100,400

Explanation 
Net income $84,500
Depreciation $11,000
Loss on sale $8,900
Decrease in A/R $18,000
Increase in inventory ($8,000)
Decrease in A/P ($10,000)
Increase in wages payable $2,000
Cash inflow from operating $100,400
The following information relates to equipment for Violet Inc.:
 2022 2021
Equipment $227,000 $182,000
Accumulated depreciation 
 $52,000. $48,000
During 2022, equipment costing $30,000 with accumulated depreciation of $18,000 was sold for $15,200. Assume all purchases and sales of equipment were for cash.
1. How much depreciation expense was recorded by Violet Inc. for 2022?
1. During 2022, Purple Inc. sold equipment with a cost of $50,000 and accumulated depreciation of $30,000 for cash. A loss of $10,000 was recognized on the sale of the equipment. What amount would be reported as an investing cash inflow from the sale of equipment on the statement of cash flows for 2022?
1. The following select information was taken from Bradley Company's financial records:--> 
If the indirect method is used to prepare the operating section of the statement of cash flows, what amount will be reported as cash from operating activities?
1. Which of the following is an example of a cash flow from an operating activity?

Accepted Answer

1. The following select information was taken from Bradley Company's financial records:--> 
If the indirect method is used to prepare the operating section of the statement of cash flows, what amount will be reported as cash from operating activities?

Accounting Exam 2 CH 11 PRACTICE PROBLEMS

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