12. The following information was taken from the 2011 financial statements of Winchester Corporation:
Accounts receivable (Gross), January 1, 2011.......... $ 108,000
Accounts receivable (Gross), December 31, 2011........ 152,000
Sales on account...................................... 2,190,000
Bad debt expenses for doubtful accounts............... 5,000
No accounts receivable were written off or recovered during the year. If Winchester prepares a statement of cash flows using the direct method, what amount should be reported as collected from customers in 2011?
13. Rose Corporation reported net income of $420,000 for 2011. Changes occurred in several balance sheet accounts as follows: Equipment ................................. $35,000 increase
Accumulated depreciation .................. 56,000 increase
Note payable .............................. 42,000 increase
Additional
information:
• During 2011, Rose sold equipment costing $35,000, with accumulated depreciation of $16,800, for a gain of $7,000.
• In December 2011, Rose purchased equipment costing $70,000 with $28,000 cash and a 12% note payable of $42,000.
• Depreciation expense for the year was $72,800.
In Rose's 2011 statement of cash flows, net cash provided by operating activities should be
117.Which of the following would be subtracted from net income using the indirect method?a.Depreciation expense.b.An increase in accounts receivable.c.An increase in accounts payable.d.A decrease in prepaid expenses.12-23
118.Which of the following would be added to net income using the indirect method?
Test Bank for Accounting: Tools for Business Decision Making, Third Edition119.Which of the following would not be an adjustment to net income using the indirectmethod?12-24
120.In calculating cash flows from operating activities using the indirect method, a loss on thesale of equipment will appear as a(n)
121.Using the indirect method, which of the following adjustments to convert net income to netcash provided by operating activities is correct?Add to Net IncomeDeduct from Net Incomea.Accounts Receivableincreasedecreaseb.Prepaid Expensesincreasedecreasec.Inventorydecreaseincreased.Taxes Payabledecreaseincrease
122.Using the indirect method, which of the following adjustments to convert net income to netcash provided by operating activities is incorrect?
123.Which of the following adjustments to convert net income to net cash provided byoperating activities is not added to net income?
124.Using the indirect method, if equipment is sold at a gain, the
Statement of Cash Flows125.On the statement of cash flows using the indirect method, patent amortization expense willa.be added to net income in the operating section.b.be deducted from net income in the operating section.c.appear as an inflow of cash in the investing section.d.appear as an outflow of cash in the investing section.Ans: a, SO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA:
Which of the following would be subtracted from net income using the indirect method?
Which of the following would be added to net income using the indirect method?
Which of the following adjustments to convert net income to net cash provided by operating activities is correct?
Which of the following adjustments to convert net income to net cash provided by operating activities isincorrect?