Reference no: EM132486105

Question 1: Which of the following would be a cash flow from operating activities? (check all that apply) "there's more than one right answer"

Option 1: Collections from customers

Option 2: Gain on sale of equipment

Option 3: Depreciation on a building

Option 4: Payments for advertising

Option 5: Payments to suppliers

Question 2: Which of the following would be a cash flow from investing activities? (check all that apply) "there's more than one right answer"

Option 1: Purchases of inventory

Option 2: Payments to acquire a company

Option 3: Proceeds from selling equipment

Option 4: Proceeds from issuing stock

Option 5: Depreciation on a building

Question 3: A company has the following cash flows:

1. Cash from operations 10
2. Cash from investing activities (1)
3. Cash from financing activities (9)
4. Which growth stage best describes this pattern of cash flows?

Option 1: Decline

Option 2: Early growth

Option 3: Stable

Option 4: Perky

Option 5: Start-up

Question 4: A company bought a $1,000,000 building and $500,000 of land with a $300,000 cash down payment and used a new mortgage to pay the balance. What is the investing cash flow in this transaction?

Option 1: ($1,000,000)

Option 2: ($1,200,000)

Option 3: ($1,500,000)

Option 4: ($300,000)

Option 5: ($1,800,000)

Question 5: Which of the following would be shown as a positive number in the Operating section of the SCF under the indirect method? (check all that apply)

Option 1: Proceeds from a mortgage

Option 2: Depreciation on a building

Option 3: Increase in Income Taxes Payable

Option 4: Gain on sale of equipment

Option 5: Decrease in Inventory

Question 6: A company has Net Income of $10, which included $2 of depreciation expense. There were no other noncash expenses in Net Income and there were no gains or losses. Accounts receivable was $20 at the beginning of the year and $25 at the end of the year. Accounts Payable was $15 at the beginning of the year and $5 at the end of the year. Inventory was $12 at the beginning of the year and $7 at the end of the year. All other balance sheet accounts were unchanged over the year. What was the company's Cash Flow from Operating Activities?

Option 1: $7

Option 2: $12

Option 3: $2

Option 4: ($2)

Option 5: $22

Question 7: A company put together a preliminary version of its financial statements. Its Net Income was $200, its Depreciation Expense was $40, and its Cash Flow from Operations was $90. The accountant found an error in computing straight-line Depreciation Expense. It should have been $50. What is Cash from Operations after fixing this mistake? (you can ignore taxes)

Option 1: $0

Option 2: $100

Option 3: $250

Option 4: $90

Option 5: $80

Question 8: A company sold PP&E for $100 cash. Prior to the sale, the net book value of the PP&E on the financial statements was $80. Thus, the company recorded a Gain on Sale of Equipment of $20 in Net Income. What is the investing cash flow in this transaction?

Option 1: $120

Option 2: $80

Option 3: $100

Option 4: $0

Option 5: $20

Question 9: During the year, a company sold $500 of inventory, paid $400 to suppliers for inventory previously purchased on account, purchased $100 of inventory for cash, acquired $75 of inventory from another company in an acquisition, and translated into US dollars the value of inventory held in foreign subsidiaries, which increased inventory by $25. Which of these Inventory transactions would show up in the operating section of the SCF? (check all that apply)

Option 1: The value of inventory held in foreign subsidiaries increased by $25 when translated into US dollars

Option 2: Acquired $75 of inventory from another company in an acquisition

Option 3: Sold $500 of inventory

Option 4: Purchased $100 of inventory for cash

Option 5: Paid $400 to suppliers for inventory previously purchased on account

Question 10: A company had EBITDA of $1000, Depreciation and Amortization Expense of $100, Interest Expense of $100, and Tax Expense of $50. What was the company's Net Income?

Option 1: ($750)

Option 2: $950

Option 3: $1250

Option 4: $750

Option 5: $1000