Reference no: EM132936474

Questions -

Q1. On the first day of the fiscal year, Hawthorne Company obtained an $88,000, 5%, 7-year installment note from Seaside Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entry Hawthorne would make for the first annual payment due on the note would include a

a. credit to Notes Payable for $10,808

b. debit to Notes Payable for $15,208

c. debit to Interest Expense for $4,400

d. debit to Cash for $15,208

Q2. A building with a book value of $54,000 is sold for $63,000 cash. Using the indirect method, this transaction should be shown on the statement of cash flows as an increase of

a. $54,000 from investing activities and an addition to net income of $9,000

b. $9,000 from investing activities

c. $54,000 from investing activities

d. $63,000 from investing activities and a deduction from net income of $9,000

Q3. Land costing $79,100 was sold for $95,200 cash. The loss on the sale was reported on the income statement as other expense. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

a. $16,100

b. $174,300

c. $79,100

d. $95,200

Q4. The current period statement of cash flows includes the following:

Cash balance at the beginning of the period$460,521 Net cash flows from operating activities184,881 Net cash flows used for investing activities(59,656)Net cash flows used for financing activities(94,941)

The cash balance at the end of the period is

a. $799,999

b. $305,924

c. $550,461

d. $490,805

Q5. Firefly Inc. sold land for $225,000 cash. The land had been purchased 5 years earlier for $275,000. The loss on the sale was reported on the income statement. On the statement of cash flows, what amount should Firefly report as an investing activity from the sale of the land?

a. $500,000

b. $275,000

c. $50,000

d. $225,000