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Simmon Incorporation’s cost of goods purchased amounted to $20,000. From the beginning

Simmon Incorporation’s cost of goods purchased amounted to $20,000. From the beginning until the end of 2011, accounts payable increased by a net amount of $7,000. How much "cash outflows for purchases" should Simmons report for 2011 on their statement of cash flows? 
A. $  7,000
B. $13,000
C. $20,000
D. $27,000

 

32. McClintock Inc. had the following information available from its 2011 balance sheet and income statement:
 

Insurance expense

$15,000

Prepaid insurance – beginning

30,000

Prepaid insurance – ending

25,000

 

 


What amount would be reported as cash outflows for insurance on the statement of cash flows for 2011 using the direct method? 
A. $70,000
B. $10,000
C. $20,000
D. $25,000

 

33. Peter Piper Inc. had the following information available from its 2011 balance sheet and income statement:
 

Insurance expense

$55,000

Prepaid insurance – beginning

8,000

Prepaid insurance – ending

5,000

 

 


What amount would be reported as cash outflows for insurance on the statement of cash flows for 2011 using the direct method? 
A. $68,000
B. $58,000
C. $42,000
D. $52,000

 

34. Tuffet Corporation had the following information available from its 2011 balance sheet and income statement:
 

Interest expense

$25,000

Interest payable – beginning

3,000

Interest payable – ending

1,000

 

 


What amount would be reported as cash outflows for interest on the statement of cash flows for 2011 using the direct method? 
A. $27,000
B. $29,000
C. $21,000
D. $23,000

 

35. Lineberger Corporation had the following information available from its 2011 balance sheet and income statement:
 

Interest expense

$68,000

Interest payable – beginning

4,500

Interest payable – ending

8,000

 

 


What amount would be reported as cash outflows for interest on the statement of cash flows for 2011 using the direct method? 
A. $71,500
B. $80,500
C. $64,500
D. $55,500

 

36. When using the indirect method of preparing a statement of cash flows, which of the following items would need to be added to net income in order to reconcile to cash provided by operating activities? 
A. Increase in accounts receivable
B. Decrease in liabilities
C. Depreciation expense
D. Increase in long-term loan

 

37. When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities? 
A. Increase in accounts payable
B. Increase in accounts receivable
C. Depreciation expense
D. Increase in property, plant, and equipment

 

38. When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities? 
A. Gain on sale of property, plant, and equipment
B. Decrease in prepaid insurance
C. Depreciation expense
D. Increase in salaries payable

 

39. The collection of interest revenue will be depicted on the statement of cash flows as a: 
A. cash inflow from an operating activity.
B. cash inflow from an investing activity.
C. cash outflow for a financing activity.
D. cash inflow from a financing activity.

 

40. The payment of interest expense will be depicted on the statement of cash flows as a: 
A. cash inflow from an operating activity.
B. cash outflow for an investing activity.
C. cash inflow from a financing activity.
D. cash outflow for an operating activity.

 

Jan 09 2020 View more View Less

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