Accouting

Consider the same scenario as in the previous question: On March 31, 2005, Cars, Inc. owes Preston Devices, one of its suppliers. $25,000 for previous purchases. During April 2005, Preston sells Cars devices with a sales price of $10,000 and a cost to Preston of $8.000. During April Cars pays Preston $12,000 against the amount owed to Preston. If Preston had no other sales and records no other collections from customers during the month of April, the operating section of Preston's indirect method statement of cash flows for April will show the following de-accrual adjustments to net income: Subtract change in accounts receivable; add change in inventory. Add change in accounts receivable: subtract change in inventory Add change in accounts receivable; add change in inventory. Subtract change in accounts receivable; subtract change in inventory. Planet Music buys all of its inventory on credit. During 2005, Planet Music's inventory account increased by $10,000. Which of the following statements must be true for Planet Music during 2005? It made payments of less than $10,000 to suppliers. It made cash payments of $10,000 to suppliers. It made more cash payments to its suppliers than it recorded as cost of goods sold. It paid less cash to suppliers than it recorded as cost of goods sold. The next 9 questions are based on Patnode Inc.'s balance sheets at year end 2004 and 2005. During 2005. Patnode announced and paid dividends of $1.000. the only dividend-related activity during the year. What was its 2005 net income? $5.600 $3.600 $4.600 Cannot be estimated