Multiple Choice Questions

Questions 1-6 use the following data. Sheehan Corporation formats operating cash flows by the indirect method.

1. How many items enter the computation of Sheehan’s net cash flow from investing activities for 2010?
a. 5
b. 3
c. 7
d. 2
2. The book value of equipment sold during 2010 was $21,000. Sheehan’s net cash flow from investing activities for 2010 was
a. Net cash used of $23,500.
b. Net cash used of $53,000.
c. Net cash used of $50,000.
d. Net cash used of $44,000.
3. How many items enter the computation of Sheehan’s net cash flow from financing activities for 2010?
a. 7
b. 3
c. 5
d. 2
4. Sheehan’s largest financing cash flow for 2010 resulted from
a. Payment of dividends.
b. Sale of equipment.
c. Purchase of equipment.
d. Issuance of common stock.
5. Sheehan’s net cash flow from financing activities for 2010 was
a. Net cash used of $21,000.
b. Net cash used of $50,000.
c. Net cash provided of $9,000.
d. Net cash used of $44,000.
6. Credit sales totaled $820,000, accounts receivable increased by $50,000, and accounts payable decreased by $30,000. How much cash did the company collect from customers?
a. $800,000
b. $820,000
c. $770,000
d. $870,000
7. Income Tax Payable was $4,500 at the end of the year and $3,000 at the beginning. Income tax expense for the year totaled $59,500. What amount of cash did the company pay for income tax during the year?
a. $62,500
b. $58,000
c. $61,000
d.$59,500

Sheehan's Income Statement for 2010 Sales revenue Gain on sale of equip Cost of goods $177,000 9,000 $186,000 114,000 6500 Other operating expenses Net income 24,000 144,500 $41,500 , The book valne of equipment sold during 2010 was $21,000. Sheehan's Comparative Balance Sheet at the end of 2010 2010 2009 2010 2009 8,000 $9,000 5,000 13,000 Accrued liabilities 6,000 4,000 Inventory..11,000 10,000 Common stock18,000 9,000 86,500 75,000 $118,500 $97,000 $ 5,500 S 3,000 Accounts payable. Accounts receivable Plant and equipment, net... 97.000 71,000 Retained ea $118.500 $97,000