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Could you please help me on this assignment.

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Masi

P10-1 The following material relates to Darrow Company: Cash Flows Classification Effect on Cash Noncash Data Operating Activity Investing Activity Financing Activity Increase Decrease Transactions a. Net loss _________ _________ _________ _________ _________ _________ b. Increase in inventory _________ _________ _________ _________ _________ _________ c. Decrease in receivables _________ _________ _________ _________ _________ _________ d. Increase in prepaid insurance _________ _________ _________ _________ _________ _________ e. Issuance of common stock _________ _________ _________ _________ _________ _________ f. Acquisition of land, using notes payable _________ _________ _________ _________ _________ _________ g. Purchase of land, using cash _________ _________ _________ _________ _________ _________ h. Paid cash dividend _________ _________ _________ _________ _________ _________ i. Payment of income taxes _________ _________ _________ _________ _________ _________ j. Retirement of bonds, using cash _________ _________ _________ _________ _________ _________ k. Sale of equipment for cash _________ _________ _________ _________ _________ _________ Required Place an X in the appropriate columns for each of the situations. P10-4 The income statement and other selected data for Frish Company follow: FRISH COMPANY Income Statement For Year Ended December 31, 2011 Net sales $640,000 Expenses: Cost of goods sold 360,000 Selling and administrative expense 43,000 Other expense 2,000 Total expenses 405,000 Income before income tax 235,000 Income tax 92,000 Net income $143,000 Other data: a. Cost of goods sold, including depreciation expense of $15,000 b. Selling and administrative expense, including depreciation expense of $5,000 c. Other expense, representing amortization of patent, $3,000, and amortization of bond premium, $1,000 d. Increase in accounts receivable $ 27,000 e. Increase in accounts payable 15,000 f. Increase in inventories 35,000 g. Decrease in prepaid expenses 1,000 h. Increase in accrued liabilities 3,000 i. Decrease in income taxes payable 10,000 Required a. Prepare a schedule of change from accrual basis to cash basis income statement. b. Using the schedule of change from accrual basis to cash basis income statement computed in (a), present the cash provided by operations, using (1) the direct approach and (2) the indirect approach. P 10-11 Answer the following multiple-choice questions: a. Which of the following could lead to cash flow problems? 1. Tightening of credit by suppliers. 2. Easing of credit by suppliers. 3. Reduction of inventory. 4. Improved quality of accounts receivable. 5. Selling of bonds. b. 1. 2. 3. 4. 5. Which of the following would not contribute to bankruptcy of a profitable firm? Substantial increase in inventory. Substantial increase in receivables. Substantial decrease in accounts payable. Substantial decrease in notes payable. Substantial decrease in receivables. c. Which of the following current asset or current liability accounts is not included in the computation of cash flows from operating activities? 1. Change in accounts receivable. 2. Change in inventory. 3. Change in accounts payable. 4. Change in accrued wages. 5. Change in notes payable to banks. d. Which of the following items is not included in the adjustment of net income to cash flows from operating activities? 1. Increase in deferred taxes. 2. Amortization of goodwill. 3. Depreciation expense for the period. 4. Amortization of premium on bonds payable. 5. Proceeds from selling land. e. Which of the following represents an internal source of cash? 1. Cash inflows from financing activities. 2. Cash inflows from investing activities. 3. Cash inflows from selling land. 4. Cash inflows from operating activities. 5. Cash inflows from issuing stock. f. How would revenue from services be classified? 1. Investing inflow 2. Investing outflow 3. Operating inflow 4. Operating outflow 5. Financing outflow g. What type of account is inventory? 1. Investing 2. 3. 4. 5. Financing Operating Noncash Sometimes operating and sometimes investing. h. 1. 2. 3. 4. 5. How would short-term investments in marketable securities be classified? Operating activities Financing activities Investing activities Noncash activities Cash and cash equivalents i. Which of the following is not a typical cash flow under operating activities? 1. Cash inflows from sale of goods or services. 2. Cash inflows from interest. 3. Cash outflows to employees. 4. Cash outflows to suppliers. 5. Cash inflows from sale of property, plant, and equipment. j. A transaction that will increase working capital is 1. Purchase of marketable securities. 2. Payment of accounts payable. 3. Collection of accounts receivable. 4. Sale of common stock. 5. None of the above. k. Working capital is defined as 1. Current assets less current liabilities. 2. Cash equivalent accounts less current liabilities. 3. Current assets less notes payable. 4. Total assets less current liabilities. 5. Current assets less cash equivalent accounts. l. Management should use the statement of cash flows for which of the following purposes? 1. Determine the financial position. 2. Determine cash flow from investing activities. 3. Determine the balance in accounts payable. 4. Determine the balance in accounts receivable. 5. None of the above. m. The purchase of land by the issuance of bonds payable should be presented in a statement of cash flows in which of the following sections? 1. Cash flows from operating activities. 2. Supplemental schedule of noncash investing and financing activities. 3. Cash flows from investing activities. 4. Cash flows from financing activities. 5. None of the above