ACCT 2102 Final Exam Study Guide With Solutions

FINAL EXAM Study Guide (Chapters 12-24) ACCT 2102 Chapter 12 1. Hilton Company reported net income of $90,000 for the year. During the year, accounts receivable increased by $21,000, accounts payable decreased by ...

FINAL EXAM Study Guide (Chapters 12-24) ACCT 2102 Chapter 12 1. Hilton Company reported net income of $90,000 for the year. During the year, accounts receivable increased by $21,000, accounts payable decreased by $9,000 and depreciation expense of $15,000 was recorded. Net cash provided by operating activities for the year is a. $75,000. (90-21-9+15) b. $135,000. c. $87,000. d. $90,000. 2. The net income reported on the income statement for the current year was $1,260,000. Depreciation recorded on plant assets was $57,000. Accounts receivable and inventories increased by $12,000 and $48,000, respectively. Prepaid expenses and accounts payable decreased by $6,000 and $66,000, respectively. How much cash was provided by operating activities? a. $1,140,000. b. $1,260,000. c. $1,197,000. (1260+57-12-48+6-66) d. $1,476,000. 3. In preparing the statement of cash flows, determining the net increase or decrease in cash requires the use of a. the adjusted trial balance. b. the current period's retained earnings statement. c. a comparative balance sheet. d. a comparative income statement. 4. Barber Company reported net income of $120,000 for the year ended December 31, 2012. During the year, inventories decreased by $24,000, accounts payable decreased by $36,000, depreciation expense was $40,000 and a gain on disposal of equipment of $18,000 was recorded. Net cash provided by operating activities in 2012 using the indirect method was a. $238,000. b. $130,000. (120+24-36+40-18) c. $154,000. d. $110.000. 5. The statement of cash flows a. must be prepared on a daily basis. b. summarizes the operating, financing, and investing activities of an entity. c. is another name for the income statement. d. is a special section of the income statement. 6. The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income. c. provide information about the cash receipts and cash payments during a period. d. facilitate banking relationships. 7. All of the following adjustments would be deducted in determining net cash provided by operating activities except a(n) a. increase in inventories. b. depreciation expense. c. gain on sale of plant assets. d. decrease in accrued expenses payable. 8. During the year, Salaries Payable decreased by $12,000. Using the direct method of reporting cash flows from operating activities, if Salary Expense amounted to $380,000 for the year, the cash paid to employees (including deductions from gross pay) is a. $392,000. (380+12) b. $380,000. c. $368,000. d. $404,000. 9. The order of presentation of activities on the statement of cash flows is a. operating, investing, and financing. b. operating, financing, and investing. c. financing, operating, and investing. d. financing, investing, and operating. 10. Which of the following is the first step in preparing the statement of cash flows? a. Determine the net cash provided by operating activities. b. Determine the net income. c. Determine net cash provided by investing and financing activities. d. Determine the net increase (decrease) in cash. 11. The net income reported on the income statement for the current year was $210,000. Depreciation was $25,000. Accounts receivable and inventories decreased by $5,000 and $15,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $500 and $4,000. How much cash was provided by operating activities? a. $240,500. b. $250,500. c. $258,500. (210000+25000+5000+15000-500+4000) d. $219,500. 12. Foster Company reported a net loss of $10,000 for the year ended December 31, 2012. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2012, operating activities a. used net cash of $2,000. b. used net cash of $8,000. c. provided net cash of $2,000. (-10+5-8+10+5) d. provided net cash of $8,000. Chapter 13 1. Sophie's Dog Supplies has income before taxes of $550,000 and an extraordinary loss of $170,000. If the income tax rate is 34% on all items, the income statement should show income before irregular items and an extraordinary loss, respectively, of a. $550,000 and ($170,000). b. $363,000 and ($57,800).