Question:

1. The net income for the year ended December 31, 2018, for Tax Consultants INC. was $1,320,000. Additional information is as follows:

Capital expenditures $1,600,000

Depreciation on plant assets 600,000

Cash dividends paid on common stock 240,000

Increase in noncurrent deferred tax liability 60,000

Amortization of patents 28,000

Based on the information given above, what should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2018?

a.$1,768,000.

b.$1,888,000.

c.$1,948,000.

d.$2,008,000.

2. Information concerning the debt of Cole Company is as follows:

Short-term borrowings:

Balance at December 31, 2017 $525,000

Proceeds from borrowings in 2018 325,000

Payments made in 2018 (450,000)

Balance at December 31, 2018 $400,000

Current portion of long-term debt:

Balance at December 31, 2017 $1,625,000

Transfers from caption "Long-Term Debt" 500,000

Payments made in 2018 (1,225,000)

Balance at December 31, 2018 $ 900,000

Long-term debt:

Balance at December 31, 2017 $9,000,000

Proceeds from borrowings in 2018 2,250,000

Transfers to caption "Current Portion of Long-Term Debt" (500,000)

Payments made in 2018 (1,500,000)

Balance at December 31, 2018 $9,250,000

In preparing a statement of cash flows for the year ended December 31, 2018, for Cole Company, cash flows from financing activities would reflect

Outflow

a.$2,000,000

b.$2,250,000

c.$2,575,000

d.$3,175,000

3. Worthington Company purchased a machine on January 1, 2015, for $7,200,000. At the date of acquisition, the machine had an estimated useful life of six years with no salvage. The machine is being depreciated on a straight-line basis. On January 1, 2018, Worthington determined, as a result of additional information, that the machine had an estimated useful life of eight years from the date of acquisition with no salvage. An accounting change was made to reflect this additional information. What amount of depreciation expense should be reported in Worthington's income statement for the year ended December 31, 2018?

a.$1,200,000

b.$900,000

c.$720,000

d.$450,000

4. On January 7, 2016, Yoder Corporation acquired machinery at a cost of $4,200,000. Yoder adopted the sum-of-the-years?-digits method of depreciation for this machine and had been recording depreciation over an estimated life of five years, with no residual value. At the beginning of 2018, a decision was made to change to the straight-line method of depreciation for this machine. Assuming a 30% tax rate, the cumulative effect of this accounting change, net of tax, is

a.$0

b.$560,000

c.$588,000

d.$840,000

5. Information from Collins Company's balance sheet is as follows:

6.

Current assets:

Cash $ 12,000,000

Short-term investments 20,000,000

Accounts receivable 50,000,000

Inventories 66,000,000

Prepaid expenses 2,000,000

Total current assets $150,000,000

Current liabilities:

Notes payable $ 11,000,000

Accounts payable 18,000,000

Accrued expenses 13,000,000

Income taxes payable 3,000,000

Current portion of long-term debt 5,000,000

Total current liabilities $ 50,000,000

What is the acid-test (quick) ratio?

a.1.24 to 1

b.1.64 to 1

c.1.68 to 1

d.3.00 to 1

7. Fargo, Inc. disclosed the following information as of and for the year ended December 31, 2018:

Net cash sales 600,000

Net credit sales 1,080,000

Inventory at beginning 100,000

Inventory at end 150,000

Net income 30,000

Accounts receivable at beginning of year 110,000

Accounts receivable at end of year 130,000

Fargo's accounts receivable turnover is

a.8.3 to 1

b.9.0 to 1

c.12.9 to 1

d.14.0 t

Please show your solution in good form.

Answer rating: 100% (QA)

1 c Explanation Net cash provided by operating activities net income depreciation expense amor... View the full answer